Annual Report - 19-20.pmd

A Subsidiary of AXIS BANK

CONTENTS

Board of Directors 2

Directors’ Report 3

Auditors’ Report 37

Balance Sheet 46

Statement of Profit and Loss Account 48

Cash Flow Statement 50

Notes to Accounts 52

A Subsidiary of AXIS BANK

BOARD OF DIRECTORS

Pralay Mondal Chairman

Gop Kumar Bhaskaran Managing Director & CEO

Anand Kumar Shaha Whole Time Director

Ramesh Kumar Bammi Director

(Resigned w.e.f. 27.04.2020)

Jagdeep Mallareddy Director

(Resigned w.e.f. 19.05.2020)

Babu Rao Busi Independent Director

Bhumika Batra Independent Director

Divya Poojari (Ms.) Company Secretary

Hemantkumar Patel Chief Financial Officer

M/s. S.R. Batliboi & Co. LLP STATUTORY AUDITORS

Chartered Accountants

M/s. RVA & Associates LLP INTERNAL AUDITORS

Chartered Accountants

M/s. BNP & Associates SECRETARIAL AUDITORS

Practising Company Secretaries

KFintech Private Limited REGISTRAR AND SHARE TRANSFER AGENT

Karvy Selenium, Tower-B, Plot No 31& 32,

Gachibowli, Financial District,

Nanakramguda, Serilingampally,

Hyderabad - 500 008, India

Tel. : +91 040 67161604

REGISTERED OFFICE

Axis House, 8

Floor, Wadia International Centre,

Pandurang Budhkar Marg, Worli, Mumbai – 400 025

CIN : U74992MH2006PLC163204

Tel. : 022 2425 2009

Email : [email protected]

Website : www.axisdirect.in / www.axissecurities.in

CORPORATE OFFICE

Phoenix Market City, Unit No. 2, 2nd Floor, 15, LBS Road,

Near Kamani Junction, Kurla (West), Mumbai – 400 070

Tel. : 022 42671500

A Subsidiary of AXIS BANK

DIRECTORS’ REPORT

DEAR MEMBERS

Your Directors have pleasure in presenting the 14

Annual Report of Axis Securities Limited (the

Company) alongwith the Audited Financial Statements for the financial year ended March 31,

2020.

FINANCIAL PERFORMANCE:-

During the year, the Company achieved a total income of 2,377,238,793/-

The highlights of the financial Results of your Company for the year ended March 31, 2020 are

given below:

(Figures in Lakhs)

Particulars 2019-20 2018-19

Operating Income(A) 19,589 19,028

Interest Income on Fixed Deposits and Miscellaneous

Income (B) 1,329 816

Total Income (A)+(B) 20,918 19,844

Operating Expenses 11,991 14,230

Profit/(Loss) before Depreciation & provisions for tax 8,927 5,614

Depreciation 1,438 1,063

Provision for Tax 2,228 1,624

Profit for the year from continuing operation 5,261 2,927

Exceptional items (2,845) –

Profit before tax for the year from discontinued

Profit before tax for the year from discontinued operations 665 6,693

Tax income/ (expense) of discontinued operations 183 2,408

Deferred tax – 50

Profit for the year from discontinued operations 482 4,335

Profit for the year 2,898 7,262

Other Comprehensive Income (164) 189

Total Comprehensive Income for the year 2,734 7,451

A Subsidiary of AXIS BANK

BUSINESS OVERVIEW & REVIEW OF OPERATIONS:-

In Financial Year 2019-20 Retail Broking has achieved overall revenue of Rs. 20918 lakhs which is

increase of 5% as compared to Rs. 19844 lakhs in Financial Year 2018-19 and have acquired 1.77

Lakhs customers.

GENERAL RESERVE:-

The Company in accordance with Section 123 of the Companies Act, 2013 (“the Act”), has

transferred a sum of Rs. 1,59,00,000/- to the General Reserve account.

MATERIAL CHANGE AND COMMITMENT:-

In terms of the information required under sub-section (3)(l) of Section 134 of the Act, it is to be

noted that no material changes and commitments, affecting the financial position of the Company

has occurred between the end of the Financial Year of the Company to which the Financial

Statements relate and to the date of the Directors Report.

ANNUAL RETURN:-

The Annual Return of the Company for the said financial year as required under Section 92 of the

Companies (Amendment) Act, 2017 is available on the website of the Company at https://

simplehai.axisdirect.in/aboutus and the same is enclosed as Annexure-A

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR

TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE:-

In terms of the information required under Section – 134 of the Act and Clause – 8 of the Companies

(Accounts) Rules, 2014 it is to be noted that there is no significant and material order passed by the

Regulators or Courts or Tribunals impacting the going concern status and Company’s operations

in future.

STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

INCLUDING IDENTIFICATION THEREIN OF ELEMENTS OF RISK:-

Risk Management is a key function in a Stock Broking Company. Real-time monitoring of overall

exposure of the Company is required from the point of view of Risk Control. In volatile markets,

robust Risk Management policies are must.

The Company has adopted a comprehensive Risk Management Policy identifying various elements

of risks, risk parameters and risk containment measures. The Company has automated risk

A Subsidiary of AXIS BANK

management systems in place. The risk system monitors various trades and positions of the clients

on real-time basis with the help of real time data feeds from Exchanges. The system also generates

automated alerts in case of specified events based on the set parameters. A dedicated risk team

monitoring the risk systems acts promptly on such alerts. The above risk processes have been put in

place for Equities, Derivatives, Commodities and Currencies etc.

Client defaults in paying up the losses arising out of client positions poses significant risk, which in

the opinion of the Board may threaten the existence of the Company. Other identified risks are

system malfunction, black swan event, Internal as well as external frauds, adverse regulatory action

against the Company etc.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:-

The Company has an Internal Control System commensurate with the size, scale and complexityof

its operations. Internal control systems comprising of policies and procedures are designed to ensure

reliability of financial reporting, timely feedback on achievement of operational and strategic

goals, compliance with policies, procedure, applicable laws and regulations and that all assets

and resources are acquired economically, used efficiently and protected adequately.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal

control system in the Company, its compliance with operating systems, accounting procedures

and policies at all locations of the Company. Based on the report of internal audit function, process

owners undertake corrective action in their respective areas and thereby strengthen the controls.

Significant audit observations and corrective actions thereon are presented to the Audit Committee

of the Board. A yearly presentation on Internal Financial Control Systems is also presented to Audit

Committee of the Board.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:-

The Company has adopted the code of conduct for employee, customers, vendors and also for

its directors for the highest degree of transparency, integrity, accountability and corporate social

responsibility. Any actual or potential violation of the Code would be a matter of serious concern

for the Company.

The Company has also in place a Whistleblower Policy (‘the Policy’) which aims to set up a

mechanism that enables employees to report about actual or potential illegal and/or

unacceptable practices. The policy is designed to enable employees, to raise concerns to

Whistleblower Committee, without revealing his/her identity, if he/she chooses to do so and to

disclose information which the individual believes, shows malpractice or wrongdoing which could

affect the business or reputation of the Company.

A Subsidiary of AXIS BANK

The Policy is to provide framework for an effective vigil mechanism and to provide protection to

employees, customers, vendors or directors reporting genuine concerns.

Employees of the Company are encouraged to use guidance provided in the Policy for reporting

all allegations of suspected improper activities to the Whistle Blower Committee by sending the

members an email on [email protected]

BOARD OF DIRECTORS, MEETINGS, EVALUATION ETC.:-

Board of Directors:-

During the year under review, following are the list of Directors being appointed or resigned from

the Board of the Company:

Sr. Name of the Status Date of Designation

No. Director appointment/

Resignation

1 Ms. Nithya Easwaran Resignation 12.04.2019 Independent Director

2 Mr. Pralay Mondal Appointment 12.04.2019 Additional Director

3. Mr. Rajiv Anand Resignation 09.05.2019 Director

4. Mr. Pralay Mondal Change in Designation 07.06.2019 Director

5. Ms. Bhumika Batra Appointment 23.07.2019 Additional Independent

Director

6. Mr. Gop Kumar

Bhaskaran Appointment 18.10.2019 Additional Director

7. Mr. Arun Thukral Resignation 31.12.2019 Managing Director

& CEO

8. Mr. Gop Kumar Change in 08.01.2020 Director

Bhaskaran Designation

9. Mr. Gop Kumar Appointment 01.01.2020 Managing Director

Bhaskaran & CEO

10. Ms. Bhumika Batra Change in Designation 08.01.2020 Independent Director

Board Meetings:-

During the year under review, the Board of Directors (hereinafter called as the “BOARD”) met for

five times viz. 12.04.2019, 16.07.2019, 24.09.2019, 18.10.2019 and 15.01.2020:

A Subsidiary of AXIS BANK

The details of the attendance of the Board are as follows:

Name of the Director Number of Board Number of Meetings

Meetings Entitled to Attend Attended

Mr. Rajiv Anand 1 1

Mr. Pralay Mondal 4 4

Mr. Ramesh Kumar Bammi 5 4

Mr. Babu Rao Busi 5 5

Ms. Nithiya Easwaran 1 1

Ms. Bhumika Batra 3 3

Mr. Jagdeep Mallareddy 5 4

Mr. Arun Thukral 4 4

Mr. Anand Kumar Saha 5 4

Mr. Gop Kumar Bhaskaran 1 1

COMMITTEES OF THE BOARD

I. AUDIT COMMITTEE

During the year under review, the Audit Committee met four times viz: 12.04.2019, 16.07.2019,

18.10.2019 and 15.01.2020

The details of the attendance of the Audit Committee Members are as follows:

Name of the Director Number of Board Number of Meetings

Meetings Entitled to Attend Attended

Ms. Nithiya Easwaran 1 1

Mr. Babu Rao Busi 4 4

Ms. Bhumika Batra 2 2

Mr. Jagdeep Mallareddy 4 3

Mr. Anand Shaha 1 0

A Subsidiary of AXIS BANK

II. NOMINATION AND REMUNERATION COMMITTEE (NRC)

During the year under review, the Nomination and Remuneration Committee met thrice viz:

12.04.2019, 18.10.2019 and 15.01.2020.

The details of the attendance of the NRC Members are as follows:

Name of the Member Number of Nomination Number of Meetings

and Remuneration Attended

Committee Meetings

Entitled to Attend

Mr. Babu Rao Busi 3 3

Mr. Rajiv Anand 1 1

Mr. Pralay Mondal 2 2

Ms. Nithiya Easwaran 1 1

Ms. Bhumika Batra 2 2

III. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)

During the year under review, the CSR Committee met two timesviz: 16.07.2019 and15.01.2020.

The details of the attendance of the CSR Committee Members are as follows:

Name of the Member Number of CSR Number of Meetings

Committee Meetings Attended

Entitled to Attend

Mr. Ramesh Kumar Bammi 2 2

Mr. Babu Rao Busi 1 1

Mr. Jagdeep Mallareddy 2 2

Mr. Arun Thukral 1 1

Mr. Gop Kumar Bhaskaran 1 1

IV. RISK MANAGEMENT COMMITTEE (RMC)

During the year under review, the Risk Management Committee met four times viz: 11.04.2019,

15.07.2019, 17.10.2019 and 14.01.2020.

A Subsidiary of AXIS BANK

The details of the attendance of the RMC Members are as follows:

Name of the Member Number of Board Meetings Number of Meetings

Entitled to Attend Attended

Mr. Jagdeep Mallareddy 4 4

Mr. Arun Thukral 3 3

Mr. Gop Kumar Bhaskaran 1 1

Mr. Anand Kumar Shaha 4 4

The intervening gap between the Meetings was within the period prescribed under the Act.

Annual Evaluation:-

The Formal Annual Evaluation has been made as follows:-

During the year under review, the Independent Directors of the Company met on March 16, 2020

without the attendance of Non-Independent Directors and Members of Management. At the

said meeting, the Independent Directors reviewed the process adopted for conduct of Board

performance evaluation as recommended by the Nomination and Remuneration Committee.

The Nomination and Remuneration Committee (the Committee) of the Company is the nodal

agency for conduct of said performance evaluation. The Committee Chairman reviewed and

approved the manner for conducting the said performance evaluation and also determined the

criteria for the same. The Committee Chairman had appointed an External Agency M/s. Potentia

Growth Services Private Limited for evaluating the performance of the Board, Committees and

Directors.

The performance evaluation of the Board was conducted on various aspects of the Board’s

functioning such as strategic planning, identification and management of risks, succession planning

and evaluation of management, audit & compliance, governance, relationship with executive

management of the Company, etc. The performance evaluation of the Committees was based

on criteria such as appropriate composition, clarity in terms of reference, regularity of meetings,

quality of discussion/deliberation at its meetings, participation of members etc. The performance

evaluation of Directors was carried out on various criteria such as attendance, participation at the

meetings, interpersonal relationship with other Directors, providing guidance, knowledge and

understanding of areas relevant to the operations of the Company, etc.

The outcomes were reviewed by the Committee and the Board in their meetings held on April 20,

2020 and April 23, 2020 and their observations/ feedback were conveyed to the concerned

stakeholders, for appropriate action.

Declaration by Independent Director:-

The Company has received the declarations from its Independent Directors that they meet the

Criteria of Independence as laid down under Section 149(6) of the Act.

A Subsidiary of AXIS BANK

Key Managerial Personnel:-

During the year under review, following were the changes in the Key Managerial Personnel:

Sr. Name of the Key Status Date of appointment/ Designation

No. Managerial Personnel resignation

1. Ms. Lovelina Faorz Resignation 29/10/2019 Company Secretary

2. Ms. Divya Poojari Appointment 30/01/2020 Company Secretary

SHARE CAPITAL:-

During the year, the Company has increased its Authorised Capital from INR 150 crores to INR 250

crores.

Further, there is no change in the Issued, Subscribed and Paid – up Share Capital of the Company.

PUBLIC DEPOSITS:-

During the year under review, the Company has not accepted any deposit pursuant to Section 73

and Section 76 of the Act read with Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE

EARNINGS AND OUTFLOWS:-

Information as per Section 134(3)(m) of the Act relating to the Conservation of Energy and

Technology Absorption is not given since the Company is not engaged in any manufacturing

activity.

During the year under review, the Company has spent Rs. 1,493,383 (Rupees Fourteen Lakh Ninety

Three Thousand Three Hundred and Eighty Three only) in foreign exchange towards technology

and other expenses. The Company has not earned any foreign exchange. The details of the Foreign

exchange outflow are enclosed in Annexure - B.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT UNDER SECTION- 186:-

Pursuant to Section 134(3)(g) of the Act, the Company has not given any Loan, Guarantee or

made Investment under Section 186 of the Act.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SUB – SECTION (1)

OF SECTION 188

Information as per Section 134(3)(h) of the Act relating to the particulars of Contracts or

Arrangements with Related Parties under Sub – Section (1)of Section 188 is as mentioned below:-

All Related Party Transactions that were entered into during the financial year were on arm’s length

basis and were in the ordinary course of business. There wereno materially significant Related Party

A Subsidiary of AXIS BANK

Transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other

designated persons which may have a potential conflict with the interest of the Company at

large.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus

approval of the Audit Committee is obtained for the transactions which are of foreseen and

repetitive in nature. The transactions entered into pursuant to the omnibus approval so granted

are audited and a statement giving details of all Related Party Transactions are placed before the

Audit Committee.

None of the Directors has any pecuniary relationship or transactions vis-à-vis the Company. The

disclosure of particulars of contracts/arrangements entered into by the Company with related

partiespursuant to Clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the

Companies (Accounts) Rules, 2014 in Form AOC – 2 is enclosed herewith as Annexure - C.

PARTICULARS OF EMPLOYEES AS REQUIRED UNDER COMPANIES ACT, 2013 AND COMPANIES

(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:-

In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and

others entitled thereto, excluding the information on employees’ particulars. If any Member is

interested in obtaining a copy thereof, such Member may write to the Company Secretary in this

regard.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:-

The Company recognized the importance of good corporate governance and corporate social

responsibility in promoting and strengthening the trust of its clients, employees, society and other

stakeholders. The Company’s Corporate Social Responsibility (CSR) activities reflect its philosophy

of helping to build a better, more sustainable society by taking into account the societal needs of

the Community.

The Company’s CSR Policy has been framed in accordance with Section 135 of the Companies

Act, 2013 and the rules thereunder. The policy shall apply to all CSR programs undertaken/sponsored

by the Company, executed through itself, its Holding Company’s Axis Bank Foundation or through

any other Trust/NGO.

As part of its initiatives under “Corporate SocialResponsibility” (CSR), the Company has contributed/

undertakenproject namely KABIL.

Project Kabilwas directed towards the following:

1. Improving the income of household by implementation of different rural livelihood interventions

with two indicators:

a) Participating Households would be earning at least INR 75,000 pa at project level by the

end of the project period.

2. Enhance technical knowledge of farmers in modern agriculture and allied activities;

A Subsidiary of AXIS BANK

3. Develop entrepreneurs from the local community for market linked livelihood development

for sustainability;

4. Access government funds to livelihood activities.

KABIL project was done through Axis Bank Foundation. The said project is in accordance with

Schedule VII of the Companies Act, 2013.

During the year under review, the Company has spent Rs. 1,93,66,947/- (Rupees One Crore Ninety

Three Lakhs Sixty Six Thousand Nine Hundred and Forty Seven Only) towards CSR activity undertaken.

For detailed report refer Annexure –D.

POLICY OF THE NOMINATION AND REMUNERATION COMMITTEE:-

The Company has a Nomination and Remuneration Policy formulated in compliance with Section

178 of the Act read along with the applicable rules thereto as amended from time to time. The

policy shall apply to all Directors (Executive and Non-Executive), Key Managerial Personnel and

Senior Management. The Policy laid down the roles of the Committee, criteria for appointment of

Directors, Key Managerial Personnel and Senior Management and parameters for determining

the remuneration of Directors, Key Managerial Personnel, Senior Management and other

employees, etc. The policy is available on the website of the Company at:

https://simplehai.axisdirect.in/images/RegulatoryDisclosure/Policies/NominationRemuneration

Policy.pdf

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION

& REDRESSAL) ACT, 2013:-

The Company has in place a policy for Prevention, Prohibition & Redressal of Sexual Harassment at

workplace which is in line with the requirements of the Sexual Harassment of Women at Workplace

(Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder.

All employees are covered under this policy. The Company has constituted an Internal Complaint

Committee for its Head office and branches under Section 4 of the captioned Act.

The details of the number of complaints filed and resolved during the year are as under:-

a. Number of complaints received during the year : 6

(2019-20)

b. Number of complaints disposed off during the year : 5

c. Number of cases pending for more than 90 days : NIL

d. Number of workshops or awareness programs : Organized workshops &

carried out against sexual harassment awareness programs at regular

intervals.

*Investigation of 1 case is under process.

A Subsidiary of AXIS BANK

DIRECTORS RESPONSIBILITY STATEMENT:-

Pursuant to sub-section (5) of Section 134 of the Act, the Board of Directors of the Company hereby

state and confirm that:

i. The applicable accounting standards have been followed in the preparation of the annual

accounts and proper explanations have been furnished, relating to material departures.

ii. Accounting policies have been selected, and applied consistently and reasonably, and

prudent judgments and estimates have been made so as to give a true and fair view of the

state of affairs of the Companyat the end of the Financial Year and of the profit of the Company

for the year ended March 31, 2020.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting

records, in accordance with the provisions of the Actfor safeguarding the assets of the

Company and for preventing and detecting fraud and other irregularities.

iv. The annual accounts of the Company have been prepared on a going concern basis.

v. The directors had laid down internal financial controls to be followed by the Company and

that such internal financial controls are adequate and were operating effectively.

vi. Proper system has been devised to ensure compliance with the provisions of all applicable

laws and such systems are adequate and operating effectively.

COMPLIANCES:-

The Company’s policy on compliance with external regulatory requirements is backed by stringent

internal policies and principles to ensure, Inter alia, priority to clients’ interests over proprietary

interest, maintenance of confidentiality of client information and prevention of insider trading.

AUDITORS:-

i. Statutory Auditors:

Pursuant to the provisions of Section 134 of the Companies Act, 2013 and the Companies (Audit

and Auditors) Rules, 2014, the Company has re-appointed

M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, Mumbai as the Statutory Auditors of the

Company to hold office from the conclusion of 12

Annual General Meeting until the conclusion of

the 17

Annual General Meeting of the Company.

The Company has received the certificate of eligibility criteria under Section 141 from the Statutory

Auditors.

A Subsidiary of AXIS BANK

Also, pursuant to the notification issued by MCA dated May 7, 2018, the requirement of ratifying

the appointment of Statutory Auditors in every Annual General Meeting is done away.

ii. Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has re-

appointed M/s. BNP & Associates, Practicing Company Secretaries, to undertake the Secretarial

Audit of the Company for the financial year under review. The Report of the Secretarial Audit

Report is annexed herewith as Annexure - E.

iii. Internal Auditors:-

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and the Companies (Accounts)

Rules, 2014, the Company has appointed

M/s. RVA &Associates, LLP Chartered Accountantsto undertake the Internal Audit of the Company

for the financial year under review.

CORPORATE GOVERNANCE:-

The Company’s policy on Corporate Governance is as under:

i. To enhance the long term interest of its shareholders, provide good management, adopt

prudent risk management techniques and comply with the applicable regulatory requirements,

thereby safeguarding the interest of its other stakeholders such as customers, employees,

creditors and vendors.

ii. To identify and recognize the Board of Directors and the Management of the Company as

the principal instruments through which good corporate governance principles are articulated

and implemented.

iii. To also identify and recognize accountability, transparency and equality of treatment for all

stakeholders, as central tenets of good corporate governance.

FUTURE OUTLOOK:-

Retail Broking:

Equity markets are passing through one of the worst crisis since 2008; the corona pandemic has

brought the world to standstill, with disrupted economic activities and lockdown of various extents

following the standard operating procedures to contain the spread. IMF expects the global

economy to contract by 3%, the US economy to shrink by around 6%, Europe by 7.5%; Indian and

China to grow at a measly rate of 1.9% and 1.2% respectively. According to the IMF, India is expected

to recover sharply in the next fiscal year posting 7.4% GDP growth.

A Subsidiary of AXIS BANK

Back home, the economy is completely at standstill for the month of April due to extension of

lockdown till May 3, 2020 though partial relaxations have been offered for essential goods industries

and relatively unaffected geographies. Post resumption of normalcy, the business would start

functioning keeping the social distancing norms. On account of the disruption in economic activities,

the earnings cycle is expected to be impacted at least for Q1FY21 but repercussions of the fall in

economic activities is expected to be seen in the financial sector as delinquencies are expected

to be spread in the rest of the year.

The government has already come up with relief measures to protect the lower strata of the society

and few more steps/stimulus is expected shortly to ensure continuity in businesses and protect

jobs. Global lockdown led demand destruction has caused a sharp drop in crude oil prices which

was already suffering from surplus supply; savings from crude oil imports would give legroom to

Indian government for infrastructure investment. RBI has taken proactive measures viz., reduced

the policy rates, cut CRR unlocking liquidity to mitigate the impact of COVID-19 crisis; temporary

moratorium of three months on payments of installments of all term loans (home, auto, personal,

agricultural, retail and crop loans) outstanding as of March 1, 2020 has also been granted. Moreover,

the central bank has assured to step in as and when required to ensure economic stability and

sufficient liquidity in the financial system.

Indian economy is expected to face real challenges as it exits lockdown; it would have to confront

potential labour shortages as the migrant labour would have left for their home towns/villages.

Getting them back at reasonable cost would be a tough challenge in the immediate future to

ensure wheels of industrial economy are put in motion. In addition, the administration would have

to ensure social distancing to ensure a second wave of infections, if any, does not occur. Moreover,

investments in specialized medical facilities at possibly every district level would be a need of hour

to attend any outbreak in future. Additional challenges like stressed corporate balance sheet esp.

NBFCs, resource strapped state and weakened MSMEs would have to be dealt with adroitly. Overall,

FY21 is expected to be a challenging year.

Indian Meteorological Dept. has indicated a ‘normal’ monsoon for 2020; good Rabi harvest and

neutral ENSO cycle (indicating normal monsoon) is likely to support demand from both rural and

urban economy for staples and discretionary consumption while low interest rates would augur

well for autos, housing/ real estate & housing finance, banking and other interest rate sensitive

sectors though capital investments are likely to be deferred given the uncertainty with demand

growth. Commodity prices are expected to trade low given the demand supply mismatch thus

benefiting the user industries.

Equity markets are expected to be volatile given the precarious situation of developed economies;

markets are expected to be driven by global market movements and the FII buying/ selling numbers

in the short term. Inadequate measures taken by developed economies (like premature opening

of lockdown without precautionary steps) to contain the virus and the possibility of a second wave

of increase in infection is also expected to keep the markets on its toes. Selling in large caps from

the overseas ETF investors or sovereign funds from Oil rich nations would also keep the indices low

in near term. Fundamentally, the recovery would happen somewhere post Q1FY21 as the market

A Subsidiary of AXIS BANK

participants factor in and look beyond the downgrades of FY21 earnings of India Inc. and start

building in earnings recovery for FY22.

AWARDS & RECOGNITION:-

During the year, the Company received accolades for its initiatives. During the year, the Company

has been awarded the following:

i. Commodity and Equity Outlook 2019(CEO 2019) in June 2019 for Retail Broker of the year.

SECRETARIAL STANDARDS:-

During the year under review, the Company has complied with the applicable Secretarial Standard

issued by Institute of Company Secretaries of India.

ACKNOWLEDGEMENT:-

Your Directors would like to express their gratitude for all the guidance and co-operation received

from its holding company - Axis Bank Limited. Your Directors would like to place on record their

gratitude to the esteemed Clients, Bankers, Financial Institutions, Suppliers, Service providers, Advisors,

Securities and Exchange Board of India (SEBI), National Stock Exchange of India Limited (NSE), BSE

Limited(BSE), National Securities Depository Limited (NSDL), Central Depository Services (India) Limited

(CDSL), Ministry of Corporate Affairs, Multi Commodity Exchange of India Limited (MCX), National

Commodity & Derivatives Exchange Limited (NCDEX), Metropolitan Stock Exchange of India Limited

(MSEI),Insurance Regulatory and Development Authority(IRDA), Central, State and Local

Government Departments for their continued support and cooperation.

The Directors also express their warm appreciation to all the employees of the Company for their

diligence and contribution.

For and on Behalf of the Board of Directors

Pralay Mondal

Chairman

DIN: 00117994

Address: Flat No. 1901 & 1902, Wing E,

Rustomjee Paramount, 18th Road,

Vithaldas Nagar, Khar West, Mumbai 400052

Place : Mumbai

Date : April 23, 2020

A Subsidiary of AXIS BANK

Form No. MGT-9 Annexure A

EXTRACT OF ANNUAL RETURN

as on the financial year ended on March 31, 2020

[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1)of the

Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS

i. CIN : U74992MH2006PLC163204

ii. Registration Date : 21/07/2006

iii. Name of the Company : Axis Securities Limited

iv. Category / Sub-Category of : Public Unlisted Company

the Company

v. Address of the Registered office : Axis House, 8

Floor, Wadia International Centre,

and contact details Pandurang Budhkar Marg, Worli, Mumbai – 400 025,

Maharashtra, India

Telephone No - 022 24252009

Email id – [email protected]

vi. Whether listed company : No

vii. Name, Address and Contact : M/s. Karvy Computershare Private Limited

details of Registrar and Transfer Karvy Selenium Tower- B, Plot No 31 & 32,

Agent, if any Gachibowli, Financial District, Nanakramguda,

Serilingampally, Hyderabad - 500 008, India.

Telephone No. : +91 040 67161604

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10% or more of the total turnover of the Company shall

be stated:-

Sr. Name and Description of main NIC Code of the % to total turnover

No. products/services Product/service of the Company

1. Business Sourcing and Resource

Management 99831130 12.72%

2. Brokerage on Securities 99715210 87.28%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

Sr. Name and address of the CIN/GLN Holding/ % of Applicable

No. Company Subsidiary/ shares Section

Associate held

1. Axis Bank Limited

Trishul, 3

Floor, L65110GJ1993PLC020769 Holding 99.999958 % 2(46)

Opp. Samartheshwar Temple,

Law Garden Ellisbridge,

Ahmedabad – 380006

A Subsidiary of AXIS BANK

IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i. Category - wise Share Holding

Category No. of shares held at the No. of shares held at the %change

of beginning of the year end of the year during

shareholders the year

Demat Physical Total % of Demat Physical Total % of

Total Total

shares shares

A. Promoters

(1) Indian

a) Individual / – – – – – – – – –

HUF

b) Central Govt. – – – – – – – – –

c) State Govt(s) – – – – – – – – –

d) Bodies Corp. – – – – – – – – –

e) Banks / FI 144,499,940 – 144,499,940 99.999958%144,499,940 – 144,499,940 99.999958% NIL

f) Any Other… – – – – – – – – –

Sub-total (A) (1): 144,499,940 – 144,499,940 99.999958%144,499,940 – 144,499,940 99.999958% NIL

(2) Foreign

a) NRIs - – – – – – – – – –

Individuals

b) Other – – – – – – – – – –

Individuals

c) Bodies Corp. – – – – – – – – –

d) Banks / FI – – – – – – – – –

e) Any Other…. – – – – – – – – –

Sub-total ––– –––– ––

(A) (2)

Total share-

holding of 144,499,940 – 144,499,940 99.999958%144,499,940 – 144,499,940 99.999958% NIL

Promoter (A) =

(A)(1)+(A)(2)

A Subsidiary of AXIS BANK

B. Public Share-

holding

1. Institutions

a) Mutual Funds – – – – – – – – –

b) Banks/ FI – – – – – – – – –

c) Central Govt – – – – – – – – –

d) State Govt(s) – – – – – – – – –

e) Venture Capital

Funds – – – – – – – – –

f) Insurance

Companies – – – – – – – – –

g) FIIs – – – – – – – – –

h) ForeignVenture

Capital Funds – – – – – – – – –

i) Others (specify) – – – – – – – – –

Sub-total (B)(1):- –– – ––– – ––

2. Non-Institutions

a) Bodies Corp. – – – – – – – – –

i) Indian – – – – – – – – –

ii) Overseas – – – – – – – – –

b) Individuals

i) Individual 60 – 60 0.000042% 60 – 60 0.000042% NIL

shareholders

holding nominal

share capital

upto Rs.1 lakh

ii) Individual share- – – – – – – – – –

holders holding

nominal share

capital in excess

of Rs. 1 lakh

c) Others(specify) – – – – – – – – –

Sub-total(B)(2):- 60 – 60 0.000042% 60 – 60 0.000042% NIL

Total Public 60 – 60 0.000042% 60 – 60 0.000042% NIL

Shareholding (B)=

(B)(1)+ (B)(2)

C. Shares held by – – – _ _ _ _ _ _

Custodian for

GDRs &ADRs

Grand Total

(A+B+C) 144,500,000 – 144,500,000 100% 144,500,000 – 144,500,000 100% _

A Subsidiary of AXIS BANK

ii. Share Holding of Promoters

Sr. Shareholder’s Shareholding at the Shareholding at the

No. Name beginning of the year end of the year

No. of % of % of Shares No. of % of % of % Change

Shares total Pledged/ Shares total Shares in share

Shares encum- shares Pledged/ holding

of the bered to of the encum- during

Company total Company bered to the year

Shares total Shares

1. Axis Bank Limited 144,499,940 99.999958 % – 144,499,940 99.999958 % – –

Total 144,499,940 99.999958 % – 144,499,940 99.999958 % ––

iii. Change in Promoters’ Shareholding (please specify, if there is no change): NO CHANGE

Sr. Shareholding at the Cumulative Shareholding

No. beginning of the year during the year

No. of shares % of total No. of shares % of total

shares of the shares of the

company company

1. At the beginning of the year – – – –

2. Datewise Increase / – – – –

Decrease in Promoters Share

holding during the year

specifying the reasons for

increase/ decrease

(e.g. allotment / transfer /

bonus/ sweat equity etc):

3. At the End of the year – – – –

iv. Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of

GDRs and ADRs):

Sr. Shareholding at the Cumulative Shareholding

No. beginning of the year during the year

For Each of No. of shares % of total No. of % of total

the Top 10 shares of the shares shares of the

Shareholders company company

1. At the beginning of year 40 0.000028% 40 0.000028%

2. Date wise Increase 09/05/2019

/ Decrease in Share Mr. Rajiv Anand

holding during the year Directors holding 10

specifying the reasons Shares resigned as

for increase /decrease the Directors of the 0.000007% 10 0.000007%

(e.g. allotment / transfer / Company

bonus / sweat equity etc): 22/05/2019

*10 Equity Shares held

by Mr. Arun Thukral

were trans fered to

Mr. Himadri Chaterjee

A Subsidiary of AXIS BANK

05/12/2019

*10 Equity Shares

held by Mr. Cyril 0 0 0

Anand were

transferred to

Mr. Pralay Mondal

(Director)

02/03/2020 0.000007% 10 0.000007%

*10 Equity Shares

held by Mr. Jairam

Sridharan were

transferred to

Mr. Ravi Narayan

3. At the End of the year 50 0.000035% 40 0.000035%

(or on the date of

separation, if separated

during the year)

v. Shareholding of Directors and Key Managerial Personnel:

Sr. Shareholding at the beginning Cumulative Shareholding

No. of the year during the year

For Each of the No. of % of total No. of % of total

Directors and shares shares of the shares shares of the

KMP company company

1. At the beginning 20 0.000014% 20 0.000014%

of the year

2. Date wise Increase / 09/05/2020 0.000007% 10 0.000007%

Decrease in Share- Mr. Rajiv Anand

holding during the Director holding

year specifying the 10 shares

reasons for increase/ resigned as the

decrease (e.g. Director of

allotment / transfer / the Company

bonus/ sweat equity 22/05/2019

etc): *10 Equity Shares

held by Mr. Arun

Thukral were

transferred to Mr.

Himadri Chatterjee

05/12/2019

*10 Equity Shares

held by Mr. Cyril

Anand were

transferred to

Mr. Pralay

Mondal (Director)

3. At the End of the year 10 0.000007% 10 0.000007%

A Subsidiary of AXIS BANK

V. INDEBTEDNESS:

Indebtedness of the Company including interest outstanding/accrued but not due for payment:

Secured Loans Unsecured Deposits Total

excluding Loans Indebtedness

deposits

Indebtedness at the beginning ––––

of the financial year

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii) ––––

Change in Indebtedness during

the financial year

• Addition – – – –

• Reduction – – – –

Net Change ––––

Indebtedness at the end of the ––––

financial year

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii) ––––

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL :

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (Figures is Rs.)

Sr. Particulars Name of MD / WTD / Manager Total

No. of Remuneration Amount

Arun Thukral, Gop Kumar Anand Kumar

Managing Bhaskaran, Shaha,

Director & CEO Managing Whole-Time

(01.04.2019- Director Director

31.12.2019) & CEO

1. Gross salary

(a) Salary as per provisions 14,072,123 10,427,788 9,425,068 3,39,24,979

contained in section 17(1)

of the Income-tax Act, 1961

(b) Value of perquisites u/s

17(2) Income-tax Act, 1961

section 17(3) Income-tax

Act, 1961

2. Stock Option

3. Sweat Equity

A Subsidiary of AXIS BANK

4. Commission

- as % of profit – – –

- others, specify.... – – –

5. Others, please specify – – –

Total (A) 14,072,123 10,427,788 9,425,068 3,39,24,979

Ceiling as per the Act

5% of the net Profit

5% of the 10% of the

net Profit net Profit

B. Remuneration to other directors:

Sr. Particulars of Name of Directors Total

No. Remuneration Amount

Rajiv Pralay Babu Rao Nithya Bhumika Ramesh Jagdeep

Anand Mondal Busi Easwaran Batra Kumar

Malla-

Bammi

reddy

1. Independent – – 6,50,000 1,50,000 3,50,000 300,000 – 14,50,000

Directors

• Fee for attending

Board & Committee

meetings

• Commission

• Others, please

specify

Total (1) – – 6,50,000 1,50,000 3,50,000 300,000 – 14,50,000

2. Other Non-Executive

Directors

• Fee for attending

Board & Committee

meetings

• Commission

• Others, please

specify

Total (2) –

Total (B)=(1+2) – – 6,50,000 1,50,000 3,50,000 300,000 – 14,50,000

Total Managerial –

Remuneration

Overall Ceiling as – – – –

–

––

1% of the

per the Act

net profit

A Subsidiary of AXIS BANK

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD (Figures is Rs.)

Sr. Particulars of Remuneration Key Managerial Personnel

no.

CEO Ms. Lovelina Mr. Divya Mr. Hemant Total

Faroz, Poojari, Patel,

Company Company CFO

Secretary Secretary

01.04.2019 30.01.2020-

31.03.2020

1. Gross salary

(a) Salary as per provisions _ 9,69,514 3,03,992 58,66,047 71,39,553

contained in section 17(1)

of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2)

Income-tax Act, 1961

section 17(3) Income-tax

Act, 1961

2. Stock Option – – – –

3. Sweat Equity – – – –

4. Commission

- as % of profit – – – –

- others, specify.... – – – –

5. Others, please specify – – – –

Total _ 9,69,514 3,03,992 58,66,047 71,39,553

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: NIL

Type Section of Brief Details of Authority Appeal

the Description Penalty / [RD/NCLT/ made, if

Companies Punishment / Court] any (give

Act Compounding details)

fees imposed

A. COMPANY

Penalty – – – – –

Punishment – – – – –

Compounding – – – – –

B. DIRECTORS

Penalty – – – – –

Punishment – – – – –

Compounding – – – – –

C. OTHER OFFICERS IN DEFAULT

Penalty – – – – –

Punishment – – – – –

Compounding – – – – –

A Subsidiary of AXIS BANK

ANNEXURE-B

PARTICULARS OF FOREIGN EXCHANGE OUTFLOWS

Name of the Party Particulars of Purpose Amount of outflow

(in Rupees)

FY 2019-20

Logmein Ireland Limited Membership and subscription 558,499

Screener Membership and subscription 300,000

Apnic Pty Ltd Australia Membership and subscription 90,159

CHART IQ Membership and subscription 544,725

Total 1,493,383

For and on Behalf of the Board of Directors

Pralay Mondal

Chairman

DIN: 00117994

Address: Flat No. 1901 & 1902, Wing E,

Rustomjee Paramount, 18th Road,

Vithaldas Nagar, Khar West, Mumbai 400052

Place : Mumbai

Date : April 23, 2020

A Subsidiary of AXIS BANK

ANNEXURE - C

FORM AOC - 2

(Pursuant to Clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) of the

Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the Company with

related parties referred to in sub–section (1) of section 188 of the Companies Act, 2013 including

certain arm’s length transactions under third proviso thereto:

1. Details of contracts or arrangements or transactions not at arm’s length basis

a) Name (s) of the related party and nature of

relationship : NIL

b) Nature of contracts/arrangements/transactions : NIL

c) Duration of the contracts / arrangements /

transactions : NIL

d) Salient terms of the contracts or arrangements

or transactions including the value, if any : NIL

e) Justification for entering into such contracts or

arrangements or transactions : NIL

f) Date(s) of approval by the Board : NIL

g) Amount paid as advances, if any : NIL

h) Date on which the special resolution was passed

in general meeting as required under first proviso : NIL

to Section 188

2. Details of material contracts or arrangement or transactions at arm’s length basis

a) Name (s) of the related party and nature of : 1. Axis Finance Limited

relationship (Group Company)

2. Axis Asset Management

Company Limited (Common

director / Group Company)

3. Axis Bank Limited

(Holding Company)

4. Axis Capital Limited

(Group Company)

b) Nature of contracts/arrangements/transactions : 1. Availing and Rendering of

services

2. Availing and Rendering of

services

3. Availing and Rendering of

services & Sale, Purchase or

supply of any goods or

materials

A Subsidiary of AXIS BANK

4. Availing and Rendering of

services

c) Duration of the contracts / arrangements / : 1. Continuous

transactions 2. Continuous

3. Continuous

4. Continuous

d) Salient terms of the contracts or arrangements : 1. Refer Financial statements

or transactions including the value, if any

e) Date (s) of approval by the Board, if any : 12.04.2019 & 18.10.2019

f) Amount paid as advances, if any : NIL

For and on Behalf of the Board of Directors

Pralay Mondal

Chairman

DIN: 00117994

Address: Flat No. 1901 & 1902, Wing E,

Rustomjee Paramount, 18th Road,

Vithaldas Nagar, Khar West, Mumbai 400052

Place : Mumbai

Date : April 23, 2020

A Subsidiary of AXIS BANK

ANNEXURE - D

Annual Report on CSR Initiatives Pursuant to Section 135 of the Act & Rules made thereunder

1. Brief Outline of the CSR Policy : The Company’s Corporate Social Responsibility

(CSR) activities reflect its philosophy of helping to

build a better, more sustainable society by taking

into account the societal needs of the Community.

For detailed policy, please refer our

website : www.axissecurities.in

2. The Composition of the CSR : Mr. Ramesh Kumar Bammi – Chairman

Committee Mr. Gop Kumar Bhaskaran – Member

Mr. Jagdeep Mallareddy – Member

Ms. Babu Rao Busi – (Member Independent

Director)

3. Average Net Profit of the : 968,347,370/-

Company for last 3 financial

years

4. The Prescribed CSR expenditure : 1,93,66,947/-

(2% of amount)

5. Details of CSR activities/projects

undertaken during the year :

a. Total amount to be spent : 1,93,66,947/-

for the financial year

b. Amount unspent, if any : NIL

c. Manner in which the amount : Annexure D. 1

spent during the financial year

6. Reason for not spending the : NIL

amount

7. Responsibility statement by the : The CSR Committee confirms that the implemen-

CSR Committee that the CSR tation and monitoring of the CSR Policy, is in

Committee states that the compliance with the CSR objectives and Policy

implementation and monitoring of the Company.

of the CSR Policy, is in compliance

with CSR objectives and Policy of

the Company

A Subsidiary of AXIS BANK

c. Manner in which the amount spent during the financial year is detailed below:

Sr. CSR Project Sector in Projects or Amount Amount Cumulative Amount

No. or activity which the programs (1) outlay spent on expenditure spent :

identified Project is Local area (budget) the projects upto the Direct or

covered or other (2) projects or or programs reporting through

Specify the programs Sub-heads: period implemen-

State and wise (1) Direct ting agency

district where expenditure

projects or on projects

programs or programs

was (2) Overheads

undertaken

1. Rural Livelihood Guwahati 1,93,66,947 1,93,66,947 1,93,66,947

Livelihood enhance- Through

mission- ment implementing

Kabil projects agency

Ramesh Kumar Bammi Gopkumar Bhaskaran

Chairman, CSR Committee Managing Director & CEO

DIN: 03411046 DIN: 07223999

Address: S 285, Third Floor, Address: Flat No. 1303/13 Floor,

Greater Kailash, D Wing, RNA Continental,

Part 2, New Delhi 110048 Chembur East, Mumbai - 400071

Place : New Delhi Place : Mumbai

Date : April 23, 2020 Date : April 23, 2020

ANNEXURE - D1

A Subsidiary of AXIS BANK

ANNEXURE - E

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2018

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule no. 9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

The Members,

Axis Securities Limited

We have conducted a Secretarial Audit of the compliance of applicable statutory provisions and

the adherence to good corporate practices by Axis Securities Limited. CIN No-

U74992MH2006PLC163204 (hereinafter called the ‘Company’) during the financial year from 1

April 2019 to 31

March 2020, (‘the year’/ ‘audit period’/ ‘period under review’).

We conducted the Secretarial Audit in a manner that provided us a reasonable basis for evaluating

the company’s corporate conducts/statutory compliances and expressing our opinion thereon.

We are issuing this report based on :

(i) our verification of the books, papers, minute books, soft copy as provided by the company

and other records maintained by the company and furnished to us, forms/ returns filed and

compliance related action taken by the company during the financial year ended 31

March

2020 as well as before the issue of this report,

(ii) Our observations shared during our visits to the Corporate office of the Company,

(iii) Compliance Certificates confirming Compliance with all laws applicable to the company

given by Key Managerial Personnel / senior managerial Personnel of the company and taken

on record by Audit Committee / Board of Directors,and

(iv) Representations made, documents shown and information provided by the company, its

officers, agents, and authorised representatives during our conduct of secretarial Audit.

We hereby report that in our opinion, during the audit period covering the financial year ended on

March 2020 the Company has:

(i) complied with the statutory provisions listed hereunder, and

(ii) Board-processes and compliance mechanism are in place to the extent, in the manner and

subject to the reporting made hereinafter.

A Subsidiary of AXIS BANK

The members are requested to read this report along with our letter of even date annexed to this

report as Annexure - A.

1. Compliance with specific statutory provisions

We further report that:

1.1 We have examined the books, papers, minute books and other records maintained by the

Company and the forms, returns, reports, disclosures and information filed or disseminated

during the year according to the applicable provisions/clauses of:

(i) The Companies Act, 2013 and the Rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 and the Rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

(iv) The following Regulations Guidelines prescribed under the Securities and Exchange Board

of India Act, 1992 (‘SEBI Regulations’):

(a) The Securities and Exchange Board of India (Prohibition of Insider Trading)

Regulations, 2015; and

(b) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer

Agents) Regulations, 1993 regarding the Companies Act,2013 and dealing with

client

(d) The Securities and Exchange Board of India (Research Analysts) Regulations, 2014;

(e) The Securities and Exchange Board of India (Portfolio Managers) Regulation, 1993.

(v) Secretarial Standards issued by The Institute of Company Secretaries of India(Secretarial

standards).

1.2 During the period under review, and also considering the compliance related action taken

by the company after 31

March, 2020 but before the issue of this report, the company has, to

the best of our knowledge and belief and based on the records, information, explanations

and representations furnished to us :

(i) Complied with the applicable provisions/clauses of the Act, Rules, SEBI Regulations and

Agreements mentioned under of paragraph 1.1

A Subsidiary of AXIS BANK

(ii) Generally complied with the applicable provisions/ clauses of :

(a) TheAct and rules mentioned under paragraph 1.1 (i);

(b) The Secretarial standards on meetings of the Board of Directors (SS-1) and Secretarial

standards on General Meetings (SS-2) mentioned under paragraph 1.1 (vi) above

to the extent applicable to Board meetings held during the year, the 13

Annual

General Meeting held on 7

June 2019 and Extra Ordinary General Meeting held

on September 25, 2019 and January 8, 2020 and the resolution passed by

circulation.The Compliance of the provisions of the Rules made under the Act

[paragraph 1.1(i)] and SS-1 [paragraph 1.1(vi) with regard to the Board meetings

held through video conferencing on various dates were verified based on the

minutes of the meetings , shown to us , by the company.

1.3 We are informed that, during the year, the company was not required to initiate any

compliance related action in respect of the following laws/rules/regulations/standards, and

was consequently not required to maintain any books, papers, minute books or other records

or file any form/returns thereunder:

(i) The Securities and Exchange Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011;

(ii) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)

Regulations, 2009;

(iii) The Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015;

(iv) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations,

2014;

(v) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)

Regulations, 2008;

(vi) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;

(vii) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; and

(viii) Foreign Exchange Management Act, 1999 and the Rules and Regulations made

thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and

External Commercial Borrowings;

1.4 There was no other law that was specifically applicable to the company, considering the

nature of its business. Hence the requirement to report on compliance with any other specific

law under paragraphs 1.1 and 1.2 above did not arise.

A Subsidiary of AXIS BANK

2. Board processes:

We further report that:

2.1 The Board of Directors of Company as on 31

March, 2020 comprised of:

(i) Two Executive Director,

(ii) Three Non-Executive Non Independent Director, and

(iii) Two Non-Executive Independent Directors, including a woman Independent Director

2.2 The processes relating to the following changes in the composition of the board of Directors

during the year were carried out in compliance with the provisions of the Act :

(i) Re-appointment of Mr Arun Thukral (DIN:03043072) as MD & CEO for term of three years

from May 25, 2019 to May 24, 2022 was approved at board meeting held on April 12,

2019.

(ii) Appointment of Mr Pralay Mondal (DIN: 00117994 ) as Additional Director of the company

was approved at the board meeting held on held on April 12, 2019 and the appointment

was regularised at 13

AGM

(iii) Resignation of Ms Nithya Eswaran(DIN:03605392), ID of the company was received on

April 12, 2019

(iv) Resignation of Mr Rajiv Anand(DIN:02541753) as Director of the company was accepted

by company on May 9, 2019 & Noted by passing circular resolution on May 13, 2019

(v) Resignation of Ms Lovelina Faroz, Company Secretary of the company was received by

the company on July 30, 2019 and was effective from October 29, 2019

(vi) Appointment of Ms Bhumika Batra (DIN: 03502004) as additional director(Independent)

of the company was approved at the board meeting held on July 16, 2019 and the

appointment was regularised at the Extra-ordinary General Meeting held on January 8,

2020

(vii) Re-appointment Mr Jagdeep Mallareddy (DIN: 07492539 ) as Director retiring by rotation

at 13

AGM,

(viii) Appointment of Mr. Gopkumar Bhaskaran (DIN:07223999 ) as MD & CEO for term starting

from January 1, 2020 to December 31, 2022 was approved at board meeting held on

October 18, 2019 and was approved by the shareholders at the Extra-ordinary General

Meeting held on January 8, 2020

A Subsidiary of AXIS BANK

(ix) Resignation of Mr Arun Thukral (DIN:03043072 ) as MD & CEO with effect from December

31, 2019 was taken on record at the board meeting held on October 18, 2019.

(x) Re-appointment of Mr Anand Kumar Saha (DIN: 02421213) as WTD & KMP for term of

three years from March 1, 2020 to February 28, 2023 was approved at board meeting

held on January 15, 2020

(xi) Appointment of Ms Divya Poojari as Company Secretary was approved by board of

directors at the board meeting held on January 15, 2020 and was effective from January

30, 2020

2.3 Adequate notice was given to all the directors to enable them to plan their schedule for the

Board meetings, except for one meeting which was convened at a shorter notice to transact

urgent business.

2.4 Notice of Board meetings was sent to directors at least seven days in advance as required

under Section 173(3) of the Act and SS-1.

2.5 Agenda and detailed notes on agenda were sent to the directors at least seven days before

the board meetings.

2.6 Agenda and detailed notes on agenda for the following items were either circulated

separately less than seven days before or at the Board meetings and consent of the Board for

so circulating them was duly obtained as required under SS-1:

(i) Supplementary agenda notes and annexures in respect of unpublished price sensitive

information such as audited financial statement/results, unaudited financial results and

connected papers, and

(ii) Additional subjects/information/presentations and supplementary notes.

2.7 A system exists for directors to seek and obtain further information and clarifications on the

agenda items before the meetings and for their meaningful participation at the meetings.

2.8 We note from the minutes verified that, at the Board meetings held during the year:

(i) Majority decisions were carried through; and

(ii) No dissenting views were expressed by any Board member on any of the subject matters

discussed, that were required to be captured and recorded as part of the minutes.

3. Compliance mechanism

There are reasonably adequate systems and processes in the company, commensurate with

the company’s size and operations, to monitor and ensure compliance with applicable laws,

A Subsidiary of AXIS BANK

rules, regulations and guidelines. There is scope for further improvement in the compliance

systems and processes, Commensurate with the increasing statutory requirements and growth

in operations.

4. Specific events/ actions

4.1 During the year, the following specific events/ actions having a major bearing on the

company’s affairs took place, in pursuance of the above referred laws, rules, regulations and

standards:

(i) Approval of members was accorded by way of ordinary resolution passed at Extra

Ordinary General Meeting held on September 25, 2019 to Increase the Authorised Share

Capital of the company from 150 crore to 250 crore

(ii) Approval of members was accorded by way of special resolution passed at Extra Ordinary

General Meeting held on September 25, 2019 for Alteration of Memorandum of

Association& Alteration of Association.

For BNP & Associates

Company Secretaries

B. Narasimha

Place : Mumbai Partner

Date : 30.04.2020 FCS 1303/C.P. No. 10440

Peer Review No-637/2019

UDIN- F001303B000190151

Firm Reg No-P2014MH037400

Note: This report is to be read with our letter of even date which is annexed as Annexure A and

forms an integral part of this report.

A Subsidiary of AXIS BANK

Annexure A

To,

The Members,

Axis Securities Limited

Secretarial Audit Report of even date is to be read along with this letter.

1. The Company’s management is responsible for maintenance of secretarial records and

compliance with the provisions of corporate and other applicable laws, rules, regulations

and standards. Our responsibility is to express an opinion on the secretarial records produced

for our audit.

2. We have followed such audit practices and processes as we considered appropriate to obtain

reasonable assurance about the correctness of the contents of the secretarial records.

3. While forming an opinion on compliance and issuing this report, we have also considered

compliance related action taken by the company after 31

March 2020 but before the issue

of this report.

4. we have considered compliance related actions taken by the company based on

independent legal /professional opinion obtained as being in compliance with law.

5. We have verified the secretarial records furnished to us on a test basis to see whether the

correct facts are reflected therein. We also examined the compliance procedures followed

by the company on a test basis. We believe that the processes and practices we followed,

provides a reasonable basis for our opinion.

6. We have not verified the correctness and appropriateness of financial records and Books of

Accounts of the Bank.

7. we have obtained the management’s representation about the compliance of laws, rules

and regulations and happening of events, wherever required.

8. Our Secretarial Audit Report is neither an assurance as to the future viability of the Bank nor of

the efficacy or effectiveness with which the management has conducted the affairs of the

Company.

For BNP & Associates

Company Secretaries

B. Narasimha

Place : Mumbai Partner

Date : 30.04.2020 FCS 1303/C.P. No. 10440

Peer Review No-637/2019

UDIN- F001303B000190151

Firm Reg No-P2014MH037400

A Subsidiary of AXIS BANK

INDEPENDENT AUDITORS’ REPORT

To the Members of Axis Securities Limited

Report on the Financial Statements

Opinion

We have audited the accompanying Ind AS financial statements of Axis Securities Limited (“the

Company”), which comprise the Balance sheet as at March 31 2020, the Statement of Profit and

Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and

the Statement of Changes in Equity for the year then ended, and notes to the financial statements,

including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us,

the aforesaid Ind AS financial statements give the information required by the Companies

Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in

conformity with the accounting principles generally accepted in India, of the state of affairs of

the Company as at March 31, 2020, its profitincluding other comprehensive income, its cash flows

and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with the Standards on

Auditing (SAs),as specified under section 143(10) of the Act. Our responsibilities under those

Standards are further described in the ‘Auditor’s Responsibilities for the Audit of theInd AS Financial

Statements’ section of our report. We are independent of the Company in accordance with the

‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical

requirements that are relevant to our audit of the financial statements under the provisions of the

Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance

with these requirements and the Code of Ethics. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial

statements.

Other Information

The Company’s Board of Directors is responsible for the other information. The other information

comprises the information included in the Annualreport,but does not include the Ind AS financial

statements and our auditor’s report thereon.

Our opinion on the Ind AS financial statements does not cover the other information and we do

not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements, our responsibility is to read the

other information and, in doing so, consider whether such other information is materially inconsistent

with the financial statements or our knowledge obtained in the audit or otherwise appears to be

materially misstated. If, based on the work we have performed, we conclude that there is a

material misstatement of this other information, we are required to report that fact. We have

nothing to report in this regard.

Responsibilities of Management for the Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Act

with respect to the preparation of these Ind ASfinancial statements that give a true and fair view

of the financial position, financial performance including other comprehensive income, cash

A Subsidiary of AXIS BANK

flows and changes in equity of the Company in accordance with the accounting principles

generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under

section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as

amended. This responsibility also includes maintenance of adequate accounting records in

accordance with the provisions of the Act for safeguarding of the assets of the Company and for

preventing and detecting frauds and other irregularities; selection and application of appropriate

accounting policies; making judgments and estimates that are reasonable and prudent; and the

design, implementation and maintenance of adequate internal financial controls, that were

operating effectively for ensuring the accuracy and completeness of the accounting records,

relevant to the preparation and presentation of the Ind AS financial statements that give a true

and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Ind AS financial statements, management is responsible for assessing the

Company’s ability to continue as a going concern, disclosing, as applicable, matters related to

going concern and using the going concern basis of accounting unless management either intends

to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’s financial reporting

process.

Auditor’s Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financial statements

as a whole are free from material misstatement, whether due to fraud or error, and to issue an

auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but

is not a guarantee that an audit conducted in accordance with SAs will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered material

if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these Ind AS financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain

professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Ind AS financial statements, whether

due to fraud or error, design and perform audit procedures responsive to those risks, and

obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The

risk of not detecting a material misstatement resulting from fraud is higher than for one resulting

from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or

the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we

are also responsible for expressing our opinion on whether the Company has adequate internal

financial controls system in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty

A Subsidiary of AXIS BANK

exists related to events or conditions that may cast significant doubt on the Company’s ability

to continue as a going concern. If we conclude that a material uncertainty exists, we are

required to draw attention in our auditor’s report to the related disclosures in the financial

statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are

based on the audit evidence obtained up to the date of our auditor’s report. However, future

events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Ind AS financial statements,

including the disclosures, and whether the Ind AS financial statements represent the underlying

transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the

planned scope and timing of the audit and significant audit findings, including any significant

deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with

relevant ethical requirements regarding independence, and to communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence,

and where applicable, related safeguards.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the

Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in

the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of

our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the

Company so far as it appears from our examination of those books;

Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity

dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid Ind AS financial statements comply with the Accounting

Standards specified under Section 133 of the Act, read with Companies (Indian

Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31,

2020 taken on record by the Board of Directors, none of the directors is disqualified as on

March 31, 2020 from being appointed as a director in terms of Section 164 (2) of the Act;

A Subsidiary of AXIS BANK

(f) With respect to the adequacy of the internal financial controls over financial reporting

of the Company with reference to these Ind AS financial statements and the operating

effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2020 has

been paid by the Company to its directors in accordance with the provisions of section

197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor’s Report in accordance

with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our

opinion and to the best of our information and according to the explanations given to

us:

i. The Company has disclosed the impact of pending litigations on its financial position

in its Ind AS financial statements – Refer Note 34 to theInd AS financial statements;

ii. The Company did not have any long-term contracts including derivative contracts

for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor

Education and Protection Fund by the Company.

For S. R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number : 301003E / E300005

per Jitendra H. Ranawat

Partner

Membership No.: 103380

Place of Signature : Mumbai

Date : 23 April 2020

A Subsidiary of AXIS BANK

Annexure 1 referred to under the heading “Report on other legal and regulatory requirements” of

our report of even date

Re: Axis Securities Limited (‘the Company’)

(i) (a) The Company has maintained proper records showing full particulars, including

quantitative details and location of fixed assets.

(i) (b) Fixed assets have been physically verified by the management during the year and no

material discrepancies were noticed on such verification.

(i) (c) According to the information and explanations given by the management, there are

no immovable properties, included in property, plant and equipment/ fixed assets of

the Company and accordingly, the requirements under paragraph 3(i)(c) of the Order

are not applicable to the Company.

(ii) The Company holds securities in dematerialized form. The Company is maintaining proper

records for securities held as stock in trade and no material discrepancies were noticed on

comparing the statement from custodian and physical shares with book records.

(iii) According to the information and explanations given to us, the Company has not granted

any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other

parties covered in the register maintained under section 189 of the Companies Act, 2013.

Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to

the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanation given to us, there are no

loans, investments, guarantees and securities granted in respect of which provisions of section

185 and 186 of the Companies Act 2013 are applicable and hence not commented upon.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the

Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly,

the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained, the Company is not in the business of sale of

any goods. Therefore, in our opinion, the provisions of clause 3(vi) of the Order are not

applicable to the Company.

(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory

dues including provident fund, income-tax, goods & services tax and other statutory

dues applicable to it. The provisions relating to employees’ state insurance, duty of

customs, duty of excise, value added tax and cess are not applicable to the Company.

(vii) (b) According to the information and explanations given to us, no undisputed amounts

payable in respect of provident fund, income-tax, goods & services tax and other

statutory dues were outstanding, at the year end, for a period of more than six months

from the date they became payable. The provisions relating to employees’ state

insurance, duty of customs, duty of excise, value added tax and cess are not applicable

to the Company.

A Subsidiary of AXIS BANK

(vii) (c) According to the records of the Company, the dues of income-tax, goods and service

tax, and cess on account of any dispute, are as follows:

Name of the Nature of dues Amount ** Period to which Forum where dispute

statute ( ) the amount relates is pending

Income Tax Penalty 2,79,94,887 2013-14 Commissoner of

Income tax

As informed, provision of sales tax, customs duty, wealth tax and excise duty are currently not

applicable to the company.

(viii) In our opinion and according to the information and explanations given by the management,

the Company has not defaulted in repayment of loans or borrowing to a financial institution,

bank or government or dues to debenture holders.

(ix) According to the information and explanations given by the management, the Company

has not raised any money way of initial public offer / further public offer / debt instruments)

and term loans hence, reporting under clause (ix) is not applicable to the Company and

hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair

view of the financial statements and according to the information and explanations given by

the management, we report that no fraud by the company or no fraud / material fraud on

the company by the officers and employees of the Company has been noticed or reported

during the year.

(xi) According to the information and explanation given by the management, the managerial

remuneration has been paid in accordance with the requisite approvals mandated by the

provisions of Section 197 read with Schedule V to the Companies Act, 2013.

(xii) In our opinion, the Company is not a Nidhi company. Therefore, the provisions of clause 3(xi)

of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with

the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where

applicable and the details have been disclosed in the notes to the financial statements, as

required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of

the balance sheet, the Company has not made any preferential allotment or private

placement of shares or fully or partly convertible debentures during the year under review

and hence reporting requirements under clause 3(xiv) are not applicable to the Company

not commented upon.

A Subsidiary of AXIS BANK

(xv) According to the information and explanations given by the management, the Company

has not entered into any non-cash transactions with directors or persons connected with him

as referred to in Section 192 of Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of Section 45-IA of

the Reserve Bank of India Act, 1934 are not applicable to the Company.

For S. R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number : 301003E / E300005

per Jitendra H. Ranawat

Partner

Membership Number : 103380

Place of Signature : Mumbai

Date : April 23, 2020

A Subsidiary of AXIS BANK

“ANNEXURE 2” TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE

FINANCIAL STATEMENTS OF AXIS SECURITIES LIMTED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the

Companies Act, 2013 (“the Act”)

To the Members of Axis Securities Limited

We have audited the internal financial controls over financial reporting of Axis Securities Limited

(“the Company”) as of March 31, 2020 in conjunction with our audit of the standalone financial

statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial

controls based on the internal control over financial reporting criteria established by the Company

considering the essential components of internal control stated in the Guidance Note on Audit of

Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants

of India. These responsibilities include the design, implementation and maintenance of adequate

internal financial controls that were operating effectively for ensuring the orderly and efficient

conduct of its business, including adherence to the Company’s policies, the safeguarding of its

assets, the prevention and detection of frauds and errors, the accuracy and completeness of the

accounting records, and the timely preparation of reliable financial information, as required under

theCompanies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial

reporting with reference to these financial statements based on our audit. We conducted our

audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial

Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10)

of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and,

both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance

Note require that we comply with ethical requirements and plan and perform the audit to obtain

reasonable assurance about whether adequate internal financial controls over financial reporting

with reference to these financial statements was established and maintained and if such controls

operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the

internal financial controls over financial reporting with reference to these financial statements and

their operating effectiveness. Our audit of internal financial controls over financial reporting included

obtaining an understanding of internal financial controls over financial reportingwith reference to

these financial statements, assessing the risk that a material weakness exists, and testing and

evaluating the design and operating effectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditor’s judgement, including the assessment of the risks

of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion on the internal financial controls over financial reportingwith reference

to these financial statements.

A Subsidiary of AXIS BANK

Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial

Statements

A company’s internal financial control over financial reportingwith reference to thesefinancial

statements is a process designed to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements for external purposes in accordance

with generally accepted accounting principles. A company’s internal financial control over financial

reporting with reference to these financial statements includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect

the transactions and dispositions of the assets of the company; (2) provide reasonable assurance

that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles, and that receipts and expenditures

of the company are being made only in accordance with authorisations of management and

directors of the company; and (3) provide reasonable assurance regarding prevention or timely

detection of unauthorised acquisition, use, or disposition of the company’s assets that could have

a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these

Financial Statements

Because of the inherent limitations of internal financial controls over financial reporting with

reference to these financial statements, including the possibility of collusion or improper

management override of controls, material misstatements due to error or fraud may occur and

not be detected. Also, projections of any evaluation of the internal financial controls over financial

reporting with reference to these financial statements to future periods are subject to the risk that

the internal financial control over financial reporting with reference to these financial statements

may become inadequate because of changes in conditions, or that the degree of compliance

with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, adequate internal financial controls over

financial reporting with reference to these financial statements and such internal financial controls

over financial reporting with reference to these financial statements were operating effectively as

at March 31, 2020, based on the internal control over financial reporting criteria established by the

Company considering the essential components of internal control stated in the Guidance Note

on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered

Accountants of India.

For S. R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number : 301003E / E300005

per Jitendra H. Ranawat

Partner

Membership Number : 103380

Place of Signature : Mumbai

Date : April 23, 2020

A Subsidiary of AXIS BANK

Balance sheet as at 31 March 2020

PARTICULARS Notes 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

ASSETS

Financial assets

Cash and cash equivalent 3 12,237 8,588

Bank balances other than (3 above) 4 24,400 13,187

Receivables

(i) Trade receivables 5 2,796 5,311

(ii) Other receivables – –

Loans 6 4,298 10,263

Other financial assets 7 6,281 1,748

Total Financial assets 50,012 39,097

Non - Financial assets

Current tax assets (net) 8 2,850 2,816

Deferred tax asset (net) 9 504 1,204

Property, plant and equipment 10 1,218 1,031

Right-of-use-asset 1,305 –

Capital work in progress 10 –35

Intangible assets under development 10 235 42

Intangible assets 10 1,497 1,386

Other non financial assets 11 883 518

Total Non- Financials assets 8,492 7,032

Assets included in disposal group in

accordance with Ind As 105 – 15,504

Total Assets 58,504 61,633

A Subsidiary of AXIS BANK

As per our report of even date

For S.R.Baltiboi & Co. LLP For and on behalf of the Board of Directors

Firm Registration No.: 301003E/E300005

Chartered Accountants

Pralay Mondal

Chairman

DIN No: 00117994

per Jitendra H. Ranawat Gopkumar Bhaskaran Anand Shaha

Partner Managing Director & CEO Whole-Time Director

Membership No. : 103380 DIN No: 07223999 DIN No: 02421213

Place : Mumbai Hemantkumar Patel Divya Poojari

Date : 23 April 2020 Chief Financial Officer Company Secretary

PAN: AGOPP9611N PAN: BIJPP6102N

Balance sheet cntd....

PARTICULARS Notes 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

LIABILITIES AND EQUITY

Financial liabilities

Payables

Trade payables 12 19,826 11,928

Lease Liabilities 1,651 124

Other financial liabilities 13 192 92

Total Financials liabilties 21,669 12,144

Non - Financial liabilities

Provisions 14 3,337 2,108

Other non-financial liabilties 15 1,916 3,575

Total Non-Financials liabilties 5,253 5,683

Equity

Equity share capital 16 14,450 14,450

Other Equity 17 17,132 18,547

Total Equity 31,582 32,997

Liabilities included in disposal group in – 10,809

accordance with Ind AS 105

Total Equity & Liabilities 58,504 61,633

Significant accounting Policies 2.1

The accompanying notes are an integral part of the financial statements

A Subsidiary of AXIS BANK

Statement of Profit and Loss for the year ended 31 March, 2020

PARTICULARS Notes Year ended Year ended

31 March, 2020 31 March, 2019

( in Lakhs) ( in Lakhs)

Continuing operation

Revenue from operations

Brokerage income 13,888 15,970

Interest on delayed payment 1,845 1,793

Other operating income 3,856 1,265

Total Revenue from operations 19,589 19,028

Other income 18 1,329 816

Total Income 20,918 19,844

Expenses:

Employee benefit expense 19 7,413 9,528

Depreciation amortization and 20 1,438 1,063

Impairment expense

Finance charges 21 363 227

Other expenses 22 4,215 4,475

Total expenses 13,429 15,293

Profit/(loss) before exceptional items and tax 7,489 4,551

Exceptional items 2,845 –

Profit before tax 4,644 4,551

Tax expense:

Current tax (1,424) (1,939)

Deferred tax (804) 315

Total tax (2,228) (1,624)

Profit for the year from continuing operation 2,416 2,927

Discontinued opearations

Profit before tax for the year from discontinued operations 665 6,693

Tax income/(expense) of discontinued operations (183) (2,408)

Deferred tax – 50

Profit for the year from discontinued operations 482 4,335

Profit for the year 2,898 7,262

Other comprehensive income (OCI)

(A) (i) Items that will be reclassified to profit or loss

(B) (i) Items that will not be reclassified to profit or loss

(a) Remeasurement of defined employee benefit plan (100) 269

(ii) Income tax relating to items that will not be

reclassified to profit or loss (64) (81)

A Subsidiary of AXIS BANK

Statement of Profit and Loss cntd....

PARTICULARS Notes Year ended Year ended

31 March, 2020 31 March, 2019

( in Lakhs) ( in Lakhs)

Other comprehensive income for the year,

net of income tax (164) 189

Total comprehensive income for the year,

net of tax attributable to: 2,734 7,451

Profit for the year 2,898 7,262

Attributable to:

Equity holders of the parent 2,898 7,262

Total comprehensive income for the year 2,734 7,451

Attributable to:

Equity holders of the parent 2,734 7,451

Earnings per equity share (nominal value of share 10)

(31 March 2019: 10)]

Basic 1.56 2.16

Diluted 1.56 2.16

Earnings per equity share for discontinued operations

(nominal value of share 10) (31 March 2019: 10)]

Basic 0.33 3.00

Diluted 0.33 3.00

Earnings per equity share for continuing operations

and discontinued operations (nominal value of share 10)

(31 March 2019: 10)]

Basic 1.89 5.16

Diluted 1.89 5.16

Significant accounting policies 2.1

The accompanying notes are an integral part of the financial statements.

As per our report of even date

For S.R.Baltiboi & Co. LLP For and on behalf of the Board of Directors

Firm Registration No.: 301003E/E300005

Chartered Accountants

Pralay Mondal

Chairman

DIN No: 00117994

per Jitendra H. Ranawat Gopkumar Bhaskaran Anand Shaha

Partner Managing Director & CEO Whole-Time Director

Membership No. : 103380 DIN No: 07223999 DIN No: 02421213

Place : Mumbai Hemantkumar Patel Divya Poojari

Date : 23 April 2020 Chief Financial Officer Company Secretary

PAN: AGOPP9611N PAN: BIJPP6102N

A Subsidiary of AXIS BANK

Cash flow statement for the year ended 31 March 2020

PARTICULARS

Year Ended Year Ended

31 March, 2020 31 March, 2019

( in Lakhs) ( in Lakhs)

Cash flow from operating activities

Profit before taxes from continuing operations 4,644 4,551

Profit/(loss) before tax from discontinued operations 665 6,693

Profit before tax 5,309 11,244

Adjustments to reconcile profit before tax to net

cash flows:

Depreciation and impairment of property,

plant and equipment 1,367 925

Amortisation and impairment of intangible assets 525 450

Gain on disposal of investment (129) (175)

Loss on disposal of property, plant and equipment 52 92

Interest income (1,189) (1,028)

Provision for doubtful debts 53 63

Prepaid rent –14

Provision for employee cost - ESOP 115 155

Finance costs 363 218

6,466 11,958

Working capital adjustments:

Decrease / (increase) in other financial asset (4,532) (9)

Decrease / (increase) in other assets 4,427 3,825

Decrease / (increase) in other non financial asset (32) 0

Decrease / (increase) in Loans 5,941 1,200

Decrease / (increase) in trade receivables 2,515 (8,366)

Decrease / (increase) in other financial liabilities 100 (15)

Increase / (decrease) in long term provisions 1,536 90

Increase / (decrease) in net employee defined

benefit liabillities (47) (80)

(Decrease) / increase in other non financial liabilities (7,793) (12)

Decrease / (increase) in employee benefit – 39

(Decrease) / increase in Liabilities for Statutory dues – 369

Increase / (decrease) in trade payables 7,898 1,708

Increase / (decrease) in provisions 806 592

Increase / (decrease) in net employee defined

benefit liabillities (171) (128)

Cash generated from operations 17,114 11,171

Income tax paid (1,641) (3,289)

Net cash flows from operating activities 15,473 7,882

A Subsidiary of AXIS BANK

As per our report of even date

For S.R.Baltiboi & Co. LLP For and on behalf of the Board of Directors

Firm Registration No.: 301003E/E300005

Chartered Accountants

Pralay Mondal

Chairman

DIN No: 00117994

per Jitendra H. Ranawat Gopkumar Bhaskaran Anand Shaha

Partner Managing Director & CEO Whole-Time Director

Membership No. : 103380 DIN No: 07223999 DIN No: 02421213

Place : Mumbai Hemantkumar Patel Divya Poojari

Date : 23 April 2020 Chief Financial Officer Company Secretary

PAN: AGOPP9611N PAN: BIJPP6102N

Cash flow statement cntd....

PARTICULARS

Year Ended Year Ended

31 March, 2020 31 March, 2019

( in Lakhs) ( in Lakhs)

Investing activities

Purchase of property, plant and equipment (835) (533)

Purchase of other Intangible assets (581) (578)

Right of use asset (1,305) –

Proceeds from sale of property, plant and equipment & other

Intangible assets 1,027 40

Investment in bank fixed deposit under lien with exchange (15,132) (4,594)

Investment in mutual funds (79,530) (1,34,679)

Redemption of mutual funds 79,716 1,36,154

Interest received (finance income) 1,276 997

Net cash flows used in investing activities (15,364) (3,193)

Financing activities

Finance charges (231) (186)

Interest paid on lease liabilities (132) –

Reepayment of lease liabilities 2,961 –

Proceeds from issuance of commercial paper – 2,500

Redemption of commercial paper – (5,000)

Dividend paid (including distribution tax) (4,007) –

Net cash flows from/(used in) financing activities (1,409) (2,686)

Net increase in cash and cash equivalents (1,300) 2,003

Cash and cash equivalents at the beginning of the year 13,537 11,534

Cash and cash equivalents at year end 12,237 13,537

Components of cash and cash equivalents as at 31st March 2020

Cash in hand – –

With scheduled bank -

On current account 12,235 6,376

On fixed deposit account – 7,160

Balance in prepaid cards 2 1

Total 12,237 13,537

The accompanying notes are an integral part of the financial statements. 2.1

A Subsidiary of AXIS BANK

Notes forming part of the financial statements

1.1 Coporate Information

Axis Securities Limited (‘the Company’) is public company domiciled in India and is

incorporated under the provision of Companies Act applicable in India. The Company is

engaged in the business of broking, distribution of financial products and advisory services.

The company is an unlisted public limited Company and is a wholly owned subsidiary of Axis

Bank Limited (the “Parent”).

2. Basis of preparation

The Balance Sheet, the Statement of Changes in Equity and the Statement of Profit and Loss

are presented in the format prescribed under Division III of Schedule III of Companies Act,

2013 as amended from time to time that are required to comply with IND AS as notified under

Section 133 of Companies Act, 2013 and other relevant provisions of the Act. The Statement

of Cash Flows has been presented as per the requirements of IND AS 7 Statement of Cash

Flows.The financial statements have been prepared under the historical cost convention and

on accrual basis, except for certain financial assets and liablities, defined benefit-plan liablities

and share based payments being measured at fair value.These financial statements are

presented in Indian Rupees (INR)/ , which is also its functional currency and all values are

rounded to nearest Lakhs except when otherwise indicated.

2.1 Significant accounting policies

i. Use of estimates

The preparation of the financial statements in conformity with the Ind AS requires the

management to make estimates and assumptions that affect the reported amounts of

assets and liabilities, revenues and expenses and disclosure of contingent liabilities at

the end of the reporting period. Actual results could differ from those estimates. The

management believes that the estimates used in the preparation of the financial

statements are prudent and reasonable. Any revisions to the accounting estimates are

recognised prospectively in the current and future periods.

ii. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and

financial liability or equity instrument of another entity. Financial assets and financial

liabilities are recognized when Company becomes party to the contractual provisions

of the instruments.

a) Date of recognition

Financial assets and liabilities, with the exception of loans, debt securities and

borrowings are initially recognised on the trade date, i.e., the date that the

Company becomes a party to the contractual provisions of the instrument. This

includes regular way trades, purchases or sales of financial assets that require

delivery of assets within the time frame generally established by regulation or

convention in the market place (regular way trades) are recognized on the trade

date, i.e., the date that the Company commits to purchase or sell the asset. Loans

are recognised when funds are transferred to the customers’ account. The

company recognises debt securities, deposits and borrowings when funds reach

the company.

A Subsidiary of AXIS BANK

b) Initial recognition, classification and subsequent measurement of financial assets

Financial assets are classified into one of the three categories for measurement

and income recognition:

• Amortized Cost (AC)

• Fair value through other comprehensive income (FVTOCI)

• Fair value through profit and loss (FVTPL)

Classification of financial assets is based on the assessment of business model and

contractual cash flow test.

Financial asset is measured at amortized cost, if both the following conditions are met:

a) The financial asset is held within a business model whose objective is to hold the financial

assets in order to collect the contractual cash flows; and

b) The contractual terms of the financial asset give rise on specific dates to cash flows that

are solely payments of principal and interest on the principal amount outstanding (SPPI).

Further other things remain the same (as in (a) and (b) above), if the financial asset is

held within a business model whose objective is achieved by both collecting contractual

cash flows and selling the financial assets, such asset/s are classified as held at FVTOCI.

In case of a financial asset that does not meet both the above conditions, it is classified

as FVTPL

iii. Classification of financial liabilities

The Company classified all financial liabilities as subsequently measured at amortized cost.

Initial and Subsequent measurement of Financial Liability

The Company measures the financial liability at its fair value plus or minus, in the case of a

financial asset or financial liability not at fair value through profit or loss, transaction costs that

are directly attributable to the acquisition or issue of the financial asset or financial liability, at

initial recognition.

Initial recognition and subsequent measurement of financial liability is based on their

classification.

De-recognition

De-recognition of financial assets

A financial asset is derecognized only when:

• The Company has transferred the rights to receive cash flows from the financial asset or

• Retains the contractual rights to receive the cash flows of the financial asset, but assumes

a contractual obligation to pay the cash flows to one or more recipients.

• Where the entity has transferred an asset, the entity evaluates whether it has transferred

substantially all risks and rewards of ownership of the financial asset. In such cases, the

financial asset is derecognized. Where the entity has not transferred substantially all risks

and rewards of ownership of the financial asset, the financial asset is not derecognized.

Notes forming part of the financial statements

A Subsidiary of AXIS BANK

• Where the entity has neither transferred a financial asset nor retains substantially all risks

and rewards of ownership of the financial asset, the financial asset is derecognized if

the entity has not retained control of the financial asset. Where the entity retains the

control of the financial asset, the asset is continued to be recognized to the extent of

continuing involvement in the financial asset.

De-recognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or

cancelled or expires. When an existing financial liability is replaced by another from the same

lender on substantially different terms, or the terms of an existing liability are substantially

modified, such an exchange or modification is treated as the de-recognition of the original

liability and the recognition of a new liability. The difference in the respective carrying amounts

is recognized in the statement of profit or loss.

iv. Reclassification of financial assets and financial liabilities

An entity is required to reclassify financial assets when and only when it changes its business

model for managing financial assets.

Reclassifications are expected to be very infrequent. Such changes must be determined by

the entity’s senior management as a result of external or internal changes and must be

significant to the entity’s operations and demonstrable to external parties.

Further re- classification is not allowed in following cases;

• Investments in equity instruments irrevocably designated as at FVTOCI cannot be

reclassified.

• Reclassification of financial liabilities

v. Impairment of financial assets

A) Trade receivables

The Company applies the Ind AS 109 simplified approach to measuring expected credit

losses which uses a lifetime expected loss allowance (ECL) for all trade receivables. The

application of simplified approach does not require the Company to track changes in

credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at

each reporting date, right from its initial recognition. To measure the expected credit

losses, trade receivables have been grouped based on shared credit risk characteristics

and the days past due. The expected loss rates are based on average of historical loss

rate adjusted to reflect current and available forward-looking information affecting the

ability of the customers to settle the receivables. The Company has also computed

expected credit loss due to significant delay in collection.

B) Other Financial Assets

For recognition of impairment loss on financial assets and risk exposure, the Company

determines that whether there has been a significant increase in the credit risk since

initial recognition. If credit risk has not increased significantly, 12-month ECL is used to

provide for impairment loss. However, if credit risk has increased significantly, lifetime

ECL is used. If in subsequent years, credit quality of the instrument improves such that

Notes forming part of the financial statements

A Subsidiary of AXIS BANK

there is no longer a significant increase in credit risk since initial recognition, then the

entity reverts to recognizing impairment loss allowance based on 12 month ECL. Life

time ECLs are the expected credit losses resulting from all possible default events over

the expected life of a financial instrument. The 12 month ECL is a portion of the lifetime

ECL which results from default events that are possible within 12 months after the year

end. ECL is the difference between all contractual cash flows that are due to the

Company in accordance with the contract and all the cash flows that the entity expects

to receive (i.e. all shortfalls), discounted at the original EIR. When estimating the cash

flows, an entity is required to consider all contractual terms of the financial instrument

(including prepayment, extension etc.) over the expected life of the financial instrument.

However, in rare cases when the expected life of the financial instrument cannot be

estimated reliably, then the entity is required to use the remaining contractual term of

the financial instrument. ECL impairment loss allowance (or reversal) recognized during

the year is recognized as income/expense in the statement of profit and loss. In balance

sheet ECL for financial assets measured at amortized cost is presented as an allowance,

i.e. as an integral part of the measurement of those assets in the balance sheet. The

allowance reduces the net carrying amount. Until the asset meets write off criteria, the

Company does not reduce impairment allowance from the gross carrying amount.

vi. Fair Value Measurement

The Company measures financial instruments such as investment in mutual funds at fair value

at each balance sheet date. Fair value is the price that would be received to sell an asset or

paid to transfer a liability in an orderly transaction between market participants at the

measurement date. Fair value measurement is based on the presumption that the transaction

to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, In the most advantageous market for the asset or

liability

The Principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants

would use when pricing the asset or liability, assuming that market participants act in their

economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s

ability to generate economic benefits by using the asset in its highest and best use or by

selling it to another marker participant that would use the asset in its highest and best use.

The company uses Net Asset Value (NAV) to fair value investments in mutual funds.

Fair value hierarchy

Ind AS 107, ‘Financial Instrument - Disclosure’ requires classification of the valuation method

of financial instruments measured at fair value in the Balance Sheet, using a three level fair-

value-hierarchy (which reflects the significance of inputs used in the measurements). The

hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical

assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3

Notes forming part of the financial statements

A Subsidiary of AXIS BANK

measurements). The three levels of the fair-value-hierarchy under Ind AS 107 are described

below:

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is

determined using valuation techniques which maximize the use of observable market data

and rely as little as possible on entity specific estimates. If all significant inputs required to fair

value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the

instrument is included in level. This is the case for unlisted equity securities included in level 3.

vii. Financial assets and financial liabilities at fair value through profit or loss

Financial assets and financial liabilities in this category are those that are not held for trading

and have been either designated by management upon initial recognition or are mandatorily

required to be measured at fair value under Ind AS 109. Management only designates an

instrument at FVTPL upon initial recognition when one of the following criteria are met. Such

designation is determined on an instrument-by-instrument basis:

The designation eliminates, or significantly reduces, the inconsistent treatment that would

otherwise arise from measuring the assets or liabilities or recognising gains or losses on them on

a different basis

The liabilities are part of a group of financial liabilities, which are managed and their

performance evaluated on a fair value basis, in accordance with a documented risk

management or investment strategy

The liabilities containing one or more embedded derivatives, unless they do not significantly

modify the cash flows that would otherwise be required by the contract, or it is clear with little

or no analysis when a similar instrument is first considered that separation of the embedded

derivative(s) is prohibited.

Financial assets and financial liabilities at FVTPL are recorded in the balance sheet at fair

value. Changes in fair value are recorded in profit and loss with the exception of movements

in fair value of liabilities designated at FVTPL due to changes in the Group’s own credit risk.

Such changes in fair value are recorded in the Own credit reserve through OCI and do not

get recycled to the profit or loss. Interest earned or incurred on instruments designated at

FVTPL is accrued in interest income or finance cost, respectively, using the EIR, taking into

account any discount/ premium and qualifying transaction costs being an integral part of

instrument. Interest earned on assets mandatorily required to be measured at FVTPL is recorded

using contractual interest rate.

viii. Revenue recognition

Revenue (other than for those items to which IND AS 109 Financial Instruments are applicable)

is measured at fair value of consideration received or receivable. IND AS 115 Revenue from

contracts with customers outlines a single comprehensive model of accounting for revenue

arising from contracts with customers and supersedes current revenue recognition guidance

found within IND ASs.

Notes forming part of the financial statements

A Subsidiary of AXIS BANK

The Company recognises revenue from contracts with customers based on five step model

as set out in IND AS 115 :

Step 1: Identify Contract(s) with a customer :

A contract is defined as an agreement between two or more parties that creates enforceable

rights and obligations and sets out the criteria for every contract that must be met.

Step 2: Identify performance obligations in the contract :

A performance obligation is a promise in a contract with a customer to transfer a good or

service to the customer.

Step 3 : Determine the transaction price :

The transaction price is the amount of consideration to which the Company expects to be

entitled in exchange for transferring promised goods or services to a customer, excluding

amounts collected on behalf of third parties.

Step 4 : Allocate the transaction price to the performance obligations in the contract :

For a contract that has more than one performance obligation, the Company allocates the

transaction price to each performance obligation in an amount that depicts the amount of

consideration to which the company expects to be entitled in exchange for satisfying each

performance obligation.

Step 5 : Recognise revenue when (or as ) the company satisfies performance obligation.

a. Business sourcing and resource management

The Company recognises the fee income on periodic bases based on the quantum of services

provided at agreed rates.

b. Brokerage fee income

Revenue recognition for brokerage fees can be divided into the following two categories:

1) Brokerage fees – point in time

Brokerage income on securities is recognized as per contracted rates at the execution of

transactions on behalf of the customers on the trade date.

2) Brokerage fees – over time

Fees earned for the provision of services are recognised over time as the customer

simultaneously receives and consumes the benefits, as the services are rendered. These include

brokerage fees which is fixed at inception irrespective of number of transaction executed.

The revenue for such contracts is recognised on consumption of benefits and the balance

unutilized plan value is recognised on maturity/ validity of plan.

c. Selling commissions/ brokerage generated from primary market operations i.e. procuring

subscriptions from investors for public offerings of companies, mutual funds etc are recorded

on determination of the amount due to the company, once the allotment of securities are

completed.

Notes to financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

d. Depository fees

Depository fees are recognized on completion of the transaction.

e. Portfolio management fees

Portfolio management fees are recognised when corpus is offered for investment by the

customer. Subsequently fees are charged at contracted rates periodically.

Further, fees are charged on withdrawal of invested funds before a specified period.

f. Interest

The Company calculates interest income by applying the (Effective Interest Rate) EIR to the

gross carrying amount of loans other than credit-impaired loans.

g. Income from investments

Income from sale of investments is determined on weighted average basis and recognised

on the trade date basis.

h. Financial risk management objectives and policies

(A) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will

fluctuate because of changes in market prices. Market risk comprises following types of

risk: interest rate risk and currency risk. Financial instruments affected by market risk include

borrowings.

(i) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument

will fluctuate because of changes in market interest rates. The Company is exposed to

interest rate risk arising mainly from borrowings with floating interest rates. The Company

is exposed to interest rate risk because the cash flows associated with floating rate

borrowings will fluctuate with changes in interest rates. The Company manages the

interest rate risks by maintaining a debt portfolio comprising a mix of fixed and floating

rate borrowings.

At the reporting date, the interest profile of the Company’s borrowings is as follows:

Exposure to interest rate risk

March 31, 2020 March 31, 2019

Fixed rate borrowings – –

Variable rate borrowings 9.80% 9.70%

Total borrowings 9.80% 9.70%

Notes to financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest

rates on that portion of loans and borrowings. With all other variables held constant, the

Group’s profit before tax is affected through the impact on floating rate borrowings, as

follows:

Increase/ decrease Effect on profit

in basis points before tax

31-Mar-19 0.45 0.16

31-Mar-20 0.10 0.03

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial

instrument will fluctuate because of changes in foreign exchange rates. As at each

reporting date, the Company does not have exposure in foreign currency, therefore it is

not exposed to currency risk.

(B) Credit Risk

Credit risk is the risk that the Company will incur a loss because its customers or counterparties

fail to discharge their contractual obligations. The company manages and controls credit risk

by setting limits on the amount of risk it is willing to accept for individual counter parties, and

by monitoring exposures in relations to such limits.The maximum exposure to credit risk for

each class of financial instruments is the carrying amount of that class of financial instruments

presented in the financial statements. The Company’s major classes of financial assets are

cash and cash equivalents, loans, term deposits, trade receivables and security deposits.Cash

and cash equivalents and term deposits with banks are considered to have negligible risk or

nil risk, as they are maintained with high rated banks/financial institutions as approved by the

Board of directors. Security deposits are kept with stock exchanges for meeting minimum

base capital requirements. These deposits do not have credit risk. The management has

established accounts receivable policy under which customer accounts are regularly

monitored. The company has a dedicated risk management team, which monitors the

positions, exposures and margins on a continous basis.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as

they become due. The Company manages its liquidity risk by ensuring, as far as possible, that

it will always have sufficient liquidity to meet its liabilities when due.

Notes to financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

The table below summarizes the maturity profile of the Company’s financial liabilities:

(Amount in Lacs)

0–1 year 1–2 year 2–3 year 3–4 year Beyond Total

4 years

01-Apr-18

Borrowings 2,468 – – – – 2,468

Trade payables 10,220 – – – – 10,220

Other financial liabilities – – – – – –

12,688 – – – – 12,688

31-Mar-19

Borrowings – – – – – –

Trade payables 11,928 – – – – 11,928

Other financial liabilities 773 – – – – 773

12,701 – – – – 12,701

31-Mar-20

Borrowings – – – – – –

Trade payables 19,826 – – – – 19,826

Other financial liabilities 1,864 – – – – 1,864

21,690 – – – – 21,690

ix. Plant, Property and Equipment including intangible assets

Plant, Property and Equipment and intangible assets are stated at cost, net off accumulated

depreciation and impairment losses, if any. Cost comprises the purchase price and any

attributable cost of bringing the asset to its working condition for its intended use.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it

increases the future benefits from the existing asset beyond its previously assessed standard of

performance. All other expenses on existing fixed assets, including day-to-day repair and

maintenance expenditure and cost of replacing parts, are charged to the Statement of profit

and loss for the period during which such expenses are incurred.

Gains or losses arising from derecognition of fixed assets are measured as the difference

between the net disposal proceeds and the carrying amount of the asset and are recognized

in the Statement of profit and loss when the asset is derecognized.

The Company’s other intangible assets mainly include the value of computer software.

An intangible asset is recognised only when its cost can be measured reliably and it is probable

that the expected future economic benefits that are attributable to it will flow to the Company.

Intangible assets acquired separately are measured on initial recognition at cost.

The residual values is considered as nil.

Notes to financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Useful lives and methods of depreciation of property, plant and equipment are reviewed at

each financial year end and adjusted prospectively

Intangible assets are amortised over the useful economic life. The amortisation expense on

intangible assets is presented as a separate line item in the statement of profit and loss.

x. Depreciation and amortization

Depreciation on plant, property and equipment is calculated on a straight-line basis using

the rates arrived at, based on the useful lives estimated by the management.

Depreciation has been provided using the following estimated useful lives:

Useful Life

Leasehold improvements Upon Lease Period

Electrical fittings and other equipments 10 Years

Furniture and fittings 10 Years

Office equipments 5 Years

Computers 3 Years

Mobile phone 2 Years

Softwares 5 Years

EPBAX 8 Years

Softwares 5 Years

Motor Vehicles 4 Years

The residual values, useful lives and methods of depreciation of property, plant and equipment

and intangible assets are reviewed at each financial year end and adjusted prospectively, if

appropriate.

Depreciation on assets sold during the year is recognised on a pro-rata basis to the Statement

of profit and loss till the date of sale of assets.

Intangible assets are amortized on a straight line basis over the estimated useful economic

life

xi. Impairment of tangible and intangible assets

The Company assesses at each reporting date whether there is an indication that an asset

may be impaired. If any indication exists, or when annual impairment testing for an asset is

required, the Company estimates the asset’s recoverable amount. An asset’s recoverable

amount is the higher of an asset’s net selling price and its value in use. The recoverable amount

Notes to financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

is determined for an individual asset, unless the asset does not generate cash inflows that are

largely independent of those from other assets or groups of assets. Where the carrying amount

of an asset exceeds its recoverable amount, the asset is considered impaired and is written

down to its recoverable amount. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset. In determining net

selling price, recent market transactions are taken into account, if available. If no such

transactions can be identified, an appropriate valuation model is used. After impairment,

depreciation is provided on the revised carrying amount of the asset over its remaining useful

life.

An assessment is made at each reporting date as to whether there is any indication that

previously recognized impairment losses may no longer exist or may have decreased. If such

indication exists, the Company estimates the asset’s recoverable amount. A previously

recognized impairment loss is reversed only if there has been a change in the assumptions

used to determine the asset’s recoverable amount since the last impairment loss was

recognized. The reversal is limited so that the carrying amount of the asset does not exceed

its recoverable amount, nor exceed the carrying amount that would have been determined,

net of depreciation, had no impairment loss been recognized for the asset in prior years. Such

reversal is recognized in the Statement of profit and loss unless the asset is carried at a revalued

amount, in which case the reversal is treated as a revaluation increase.

xii. Leases

Effective April 1, 2019 (date of initial application), the Company has adopted the Indian

Accounting Standard 116 (‘Ind AS 116’), notified by the Ministry of Corporate Affairs (MCA)

which replaces the existing Indian Accounting Standard 17 on Leases (‘Ind AS-17’).The

Company enters into various lease contracts as lessee that conveys the right to use an asset

for a period of time in exchange for a consideration. In addition, the company also assesses

at the inception whether any other arrangement contains a lease by conveying the right to

control the use of an indentified asset for a period of time in exchange for consideration. A

Right-of-use asset is recognised representing its right to use the underlying asset for the lease

term at the lease commencement date except in case of short term lease with a term of

twelve months or less and low value lease which are accounted as an operating expense on

a straight line basis over the lease term. The Cost of the right-of- use asset measured at inception

shall comprise of the amount of the initial measurement of the lease incentives received, plus

any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less

any accumulated depreciation, accumulated impairment losses, if any and adjusted for any

re measurement of the lease liability. The right-of-use assets is depreciated using the straight-

line method from the commencement date over the lease term.Right-of-use assets are tested

for impairment whenever there is any indication that their carrying amounts may not be

recoverable. Impairment loss,if any is recognised in the statement of Profit and Loss.The

Notes to financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Company measures the lease liability at the present value of the lease payment that are not

paid at the commencement date of the lease. The lease payments are discounted using the

interest rate implicit in the lease and if that rate cannot be readily determined the company

uses the incremental borrowing rate. The lease payments shall includes fixed payment, Variable

lease payments, the amount expected to be payable under the residual value gurantees,

excercise price of purchase options if the company is reasonably certain to excercise that

option and payment of penalties for terminating the lease, if the lease term reflects the

company exercising an option to terminate the lease. Lease Payments have been disclosed

under cash flow from financing activities. Certain lease arrangement includes the option to

extend or terminate the lease before the end of the lease term. Right-to-use assets and lease

liabilities includes these options when it is reasonably certain that they will be excercised.The

lease liabilities are re measured with a corresponding adjustment to the related right-of-use

asset if the company changes its assessment whether it will exercise an extension or a

termination option.

xiii. Borrowings

Borrowing costs include interest expense as per the effective interest rate (EIR) and other

costs incurred by the Company in connection with the borrowing of funds. Borrowing costs

directly attributable to acquisition or construction of those tangible fixed assets which

necessarily take a substantial period of time to get ready for their intended use are capitalized.

Other borrowing costs are recognized as an expense in the year in which they are incurred.

The difference between the discounted amount mobilized and redemption value of

commercial papers is recognized in the statement of profit and loss over the life of the instrument

using the EIR.

xiv. Retirement and other employee benefits

a. Retirement benefits in the form of provident fund is a defined contribution scheme and

the contributions are charged to the Statement of profit and loss of the year when the

contributions to the respective funds are due. There are no obligations other than the

contribution payable to the provident fund.

b. Gratuity liability is a defined benefit obligation and is provided for on the basis of an

actuarial valuation using projected unit credit method, made at each year end.

Company recognizes the service cost (past and current), gain and losses on curtailment,

non-routine settlement, net interest income or expense to Profit and Loss. Re-

measurement comprising of actuarial gain and losses on obligations/plan assets due to

change in demographic, financial assumptions and experience are recognized

immediately in the balance sheet with corresponding debit or credit to retained earnings

in the period in which they occur through OCI under items that will not be reclassified to

profit or loss.

Notes to financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

xv. Income taxes

Current income tax

Current income tax is measured at the amount expected to be paid to the tax authorities in

accordance with the Income Tax Act, 1961. The tax rates and tax laws used to compute the

amount are those that are enacted or substantively enacted, at the reporting date.

Current income tax relating to items recognized outside profit or loss is recognised outside

profit or loss (either in other comprehensive income or equity). Current tax items are recognised

in correlation to the underlying transaction either in OCI or directly in equity. Management

periodically evaluates positions taken in the tax returns with respect to situations in which

applicable tax regulations are subject to interpretation and establishes provisions where

appropriate.

Deferred income tax

a. Deferred tax is provided using the liability method on temporary differences between

the tax bases of assets and liabilities and their carrying amounts for financial reporting

purposes at the reporting date.

b. Deferred tax liabilities are recognised for all taxable temporary differences, except:

When the deferred tax liability arises from the initial recognition of goodwill or an asset or

liability in a transaction that is not a business combination and, at the time of the

transaction, affects neither the accounting profit nor taxable profit or loss.

c. Deferred tax assets are recognised for all deductible temporary differences, the carry

forward of unused tax credits and any unused tax losses. Deferred tax assets are

recognised to the extent that it is probable that taxable profit will be available against

which the deductible temporary differences, and the carry forward of unused tax credits

and unused tax losses can be utilized, except:

d. When the deferred tax asset relating to the deductible temporary difference arises from

the initial recognition of an asset or liability in a transaction that is not a business

combination and, at the time of the transaction, affects neither the accounting profit

nor taxable profit or loss.

e. The carrying amount of deferred tax assets is reviewed at each reporting date and

reduced to the extent that it is no longer probable that sufficient taxable profit will be

available to allow all or part of the deferred tax asset to be utilized. Unrecognised deferred

tax assets are re-assessed at each reporting date and are recognised to the extent that

it has become probable that future taxable profits will allow the deferred tax asset to be

recovered.

f. Deferred tax assets and liabilities are measured at the tax rates that are expected to

apply in the year when the asset is realized or the liability is settled, based on tax rates

Notes to financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Notes to financial statements for the year ended 31 March, 2020

(and tax laws) that have been enacted or substantively enacted at the reporting

date.

g. Deferred tax relating to items recognised outside profit or loss is recognised outside profit

or loss (either in other comprehensive income or in equity). Deferred tax items are

recognised in correlation to the underlying transaction either in OCI or directly in equity.

h. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right

exists to set off current tax assets against current tax liabilities and the deferred taxes

relate to the same taxable entity and the same taxation authority.

i. Tax benefits acquired as part of a business combination, but not satisfying the criteria for

separate recognition at that date, are recognised subsequently if new information about

facts and circumstances change. Acquired deferred tax benefits recognised within the

measurement period reduce goodwill related to that acquisition if they result from new

information obtained about facts and circumstances existing at the acquisition date. If

the carrying amount of goodwill is zero, any remaining deferred tax benefits are

recognised in OCI/ capital reserve depending on the principle explained for bargain

purchase gains. All other acquired tax benefits realized are recognised in profit or loss.

xvi. Foreign currency transactions

Foreign currency transactions are recorded at the exchange rate prevailing on the date of

transaction. Monetary items denominated in foreign currencies are restated at the exchange

rate prevailing on the balance sheet date. Exchange differences arising on settlement of

transaction and on account of restatement of monetary items are dealt with in the Statement

of profit and loss.

xvii. Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable

to equity shareholders (after deducting attributable taxes) by the weighted average number

of equity shares outstanding during the period from continuing and discontinued operations

separately.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period

attributable to equity shareholders and the weighted average number of shares outstanding

during the period are adjusted for the effects of all dilutive potential equity shares from

continuing and discontinued operations separately.

xviii.Share based payments

Share based payment arrangement includes arrangement between entity and employees.

Most common application is Employee stock options (ESOP) payment. All transactions involving

share based payment are recognized as expenses or assets over underlying vesting period.

A Subsidiary of AXIS BANK

Notes to financial statements for the year ended 31 March, 2020

All equity settled share based payments are measured at fair value as on grant date for

employee services and expenses are recognized over vesting period.

Equity Settled Transaction

The cost of equity-settled transactions is determined by the fair value at the date when the

grant is made using an appropriate valuation model.

That cost is recognized, together with a corresponding increase in share-based payment (SBP)

reserves in equity, over the period in which the performance and/or service conditions are

fulfilled in employee benefits expense. The cumulative expense recognized for equity-settled

transactions at each reporting date until the vesting date reflects the extent to which the

vesting period has expired and the Company’s best estimate of the number of equity

instruments that will ultimately vest. The statement of profit and loss expense or credit for a

period represents the movement in cumulative expense recognized as at the beginning and

end of that period and is recognized in employee benefits expense.

Service and non-market performance conditions are not taken into account when determining

the grant date fair value of awards, but the likelihood of the conditions being met is assessed

as part of the Company’s best estimate of the number of equity instruments that will ultimately

vest. Market performance conditions are reflected within the grant date fair value. Any other

conditions attached to an award, but without an associated service requirement, are

considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value

of an award and lead to an immediate expensing of an award unless there are also service

and/or performance conditions.

No expense is recognized for awards that do not ultimately vest because non-market

performance and/or service conditions have not been met. Where awards include a market

or non-vesting condition, the transactions are treated as vested irrespective of whether the

market or non-vesting condition is satisfied, provided that all other performance and/or service

conditions are satisfied.

When the terms of an equity-settled award are modified, the minimum expense recognized is

the expense had the terms had not been modified, if the original terms of the award are met.

An additional expense is recognized for any modification that increases the total fair value of

the share-based payment transaction, or is otherwise beneficial to the employee as measured

at the date of modification. Where an award is cancelled by the entity or by the counterparty,

any remaining element of the fair value of the award is expensed immediately through profit

or loss.

xix. Provisions

A provision is recognized when the Company has a present obligation as a result of past

event; it is probable that an outflow of resources will be required to settle the obligation, in

respect of which a reliable estimate can be made of the amount of obligation. Provisions are

A Subsidiary of AXIS BANK

not discounted to its present value and are determined based on best estimate required

to settle the obligation at the reporting date. These are reviewed at each reporting

date and adjusted to reflect the current best estimates.

xx Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at

bank and in hand and short-term investments with an original maturity of three months

or less.

xxi. Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose existence

will be confirmed by the occurrence or non-occurrence of one or more uncertain future

events beyond the control of the Company or a present obligation that is not recognized

because it is not probable that an outflow of resources will be required to settle the

obligation. A contingent liability also arises in extremely rare cases where there is a liability

that cannot be recognized because it cannot be measured reliably. The Company

does not recognize a contingent liability but discloses its existence in the financial

statements.

When there is a possible obligation or a present obligation in respect of which the

likelihood of outflow of resources is remote, no provision or disclosure is made.

2.2 Changes in accounting policies and disclosures

New and amended standards

The Company applied Ind AS 116 Leases for the first time. The nature and effect of the changes

as a result of adoption of this new accounting standard is described below.

Ind AS 116 Leases

The Company adopted Ind AS 116 using the modified retrospective method of adoption,

with the date of initial application on 1 April 2019. As modified retrospective method of adoption

is applied, comparative figures are not restated and the cumulative effect of initially applying

the standard is recognised as an adjustment to the opening balance of retained earnings (or

other component of equity, as appropriate) at the date of initial application. The Company

elected to use the transition practical expedient to not reassess whether a contract is, or

contains, a lease at 1 April 2019. Instead, the Company applied the standard only to contracts

that were previously identified as leases applying Ind AS 17 at the date of initial application.

The Company also elected to use the recognition exemptions for lease contracts that, at the

commencement date, have a lease term of 12 months or less and do not contain a purchase

option (short-term leases), and lease contracts for which the underlying asset is of low value

(low-value assets).

Notes to financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Impact on consolidated balance sheet (increase / (decrease))

31 March 2020

( in Lakhs)

Assets

Right-of-use assets 1,305

Total assets 1,305

Equity

Retained earnings 494

Total equity 494

Liabilities

Lease liabilities (1,651)

Deferred tax liabilities 87

Total liabilities (1,564)

Impact on statement of profit and loss (increase/(decrease) in profit)

31 March 2020

Depreciation and amortisation 803

Other expenses (1,202)

Finance cost 161

Profit for the period (238)

Attributable to:

Equity holders of the parent (238)

Depreciation and amortisation 803

Impact on consolidated statement of cash flows (increase/(decrease)

31 March 2020

Operating lease payments* (1,202)

Net cash flows from operating activities (1,202)

Payment of principal portion of lease liabilities 1,651

Payment of interest portion of lease liabilities 161

3. Cash and cash equivalents

31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Cash and cash equivalents

Balances with banks :

– In current accounts 12,235 4,587

– Balance in prepaid cards 2 1

– Deposits with original maturity of less than three months – 4,000

Cash in hand 0* –

12,237 8,588

* The Amount is less than 50,000/-

4. Bank balances other than (3 above)

31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Bank balances

– Deposits with original maturity for more than 12 months – 2

– Deposits with original maturity for more than 11,974 13,185

12 months under lien

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Notes forming part of the financial statements for the year ended 31 March, 2020

– Deposits with original maturity for more than – –

3 months but less than 12 months

– Deposits with original maturity for more than 4,431 –

3 months but less than 12 months under lien

– Deposits with original maturity for less than 7,995

3 months under lien

24,400 13,187

5. Trade Receivables

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Receivables from others 2,778 5,311

Receivables from other related parties (Note) 18 –

2,796 5,311

Break-up for security details:

Unsecured, considered good unless stated otherwise

Unsecured, considered good – –

Doubtful 189 187

189 187

Allowances for Impairement Loss (189) (187)

(A) – –

Other receivables

Unsecured considered good

- Due from holding company 18 –

- Due from others 2,778 5,311

Doubtful 38 45

2,834 5,356

Allowances for Impairement Loss (38) (45)

(B) 2,796 5,311

Other receivables ––

Total 2,796 5,311

6. Loans

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Funding under margin trading facility (secured)* 4,320 10,263

Less: Provision on Funding under margin trading facility (22) –

4,298 10,263

* This represent the margin trading facility extended to broking customers which are fully

secured against cash and/ or collateral of approved securities.

A Subsidiary of AXIS BANK

Notes forming part of the financial statements for the year ended 31 March, 2020

7. Other Financial Asset

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Security deposit

- Unsecured, considered good 525 526

- Unsecured, considered doubtful 26 21

551 547

Less: Provision for doubtful receivable (26) (21)

A 525 526

Non-current bank balances - Fixed Deposits 4,889 970

Interest accrued on fixed deposits 167 252

B 5,056 1,222

Others

Other receivables 700 –

C 700 –

Total (A) + (B)+ ( C) 6,281 1,748

8. Current Tax assets (net)

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Advance income-tax (net) 2,850 2,816

2,850 2,816

9. Deffered Tax

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Compensated Absense Cost – 48

Gratuity 58 135

Rent 190 135

Doubtful debts/ receivables 78 89

FA Difference 178 167

504 574

OCI section

Deferred tax related to items recognised in OCI during in the year:

Deferred Tax -IGAAP 504 574

On Subscription – 630

On Employee benefit plan (17) (81)

Deferred Tax Adjustment IND AS B/S (17) 549

Deferred Tax- Ind AS-OCI 17 81

Deferred Tax Asset In IND AS B/S 504 1,204

A Subsidiary of AXIS BANK

10. Property, Plant and Equipment

( in Lakhs)

Particulars Improve- Furniture Office Com- Motor Capital Total

ments to equip- puters vehicle work

leasehold ment in

premises progress

Cost or valuation

At 1 April 2018 1,202 1,231 970 2,309 – 156 5,868

Additions 98 120 71 365 – 35 689

Disposals 74 103 77 24 – 278

Discontinued operations 636 950 234 338 – 2,159

At 1 April 2019 590 297 730 2,311 – 35 3,964

Inter Departmental Transfer 636 950 234 338 – 2,159

Additions 89 – 14 628 69 799

Disposals 655 966 285 321 – 2,227

At 31 March 2020 660 281 693 2,957 69 – 4,660

Depreciation and impairment

At 1 April 2018 418 433 537 1,746 – – 3,134

Depreciation charge for the

year 148 131 160 423 – 863

Disposals 32 46 46 22 – 146

Impairment 25 31 5 – – 62

Discontinued operations 223 381 141 272 – 1,016

At 1 April 2019 337 169 516 1,876 – – 2,897

Inter Departmental Transfer 223 381 141 272 – 1,016

Depreciation charge for the 133 85 126 316 4 664

period

Disposals 289 460 202 297 – 1,247

Impairment 71 42 (1) – – 112

At 31 March 2020 475 216 580 2,167 4 – 3,442

Net Book Value Improve- Furniture Office Com- Motor Capital Total

ments to equip- puters vehicle work

leasehold ment in

premises progress

At 31 March 2020 185 65 113 790 65 – 1,218

At 31 March 2019 254 129 213 435 – 35 2,209

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Notes forming part of the financial statements for the year ended 31 March, 2020

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Property, plant and equipment 1,218 1,031

Capital work in progress – 35

10. Other Intangible assets

( in Lakhs)

Particulars Software Intangible Total

asset under

development

Cost or valuation

At 1 April 2018 2,968 66 3,034

Additions 601 42 643

Disposals 1 66 67

Discontinued operations 261 – 261

At 1 April 2019 3,307 42 3,349

Interdepartmental Transfer 261 – 261

Additions 616 193 809

Disposals 212 – 212

At 31 March 2020 3,972 235 4,207

Depreciation and impairment

At 1 April 2018 1,580 – 1,580

Additions 450 450

Disposals 1 1

Discontinued operations 108 108

At 1 April 2019 1,921 – 1,921

Interdepartmental Transfer 108 108

Depreciation charge for the year 558 558

Disposals 112 112

At 31 March 2020 2,475 – 2,475

Net Book Value Software Intangible Total

asset under

development

At 31 March 2020 1,497 235 1,732

At 31 March 2019 1,386 42 1,428

Net Book Value 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Other Intangible assets 1,497 1,386

Intangible asset under development 235 42

A Subsidiary of AXIS BANK

Notes forming part of the financial statements for the year ended 31 March, 2020

11. Other non-financial asset

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Capital Advances ––

Advances recoverable in cash or kind 327 90

Others

Prepaid expenses 314 283

Balances with statutory / government authorities 242 145

883 518

12. Trade Payables

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Trade payables

a) Total outstanding dues of micro enterprises

and small enterprises – –

b) Total outstanding dues of creditors other than

micro enterprises and small enterprises 19,826 11,928

Total 19,826 11,928

13. Other Financial Liabilities

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Overdraft Balances 16 1

Expense creditors

- Due to holding company 89 86

- Due to others 87 5

Total 192 92

14. Provisions

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Provision for bonus 1,919 989

A 1,919 989

Provision for employee benefits

Gratuity payable 228 275

Leave availment payable – 123

B 228 398

A Subsidiary of AXIS BANK

Others

Provision for expenses 1,190 721

C 1,190 721

Total (A) + (B)+ ( C) 3,337 2,108

15. Other non-financial Liabilities

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Other liabilities

Income received in advance 111 2,894

Undisputed statutory dues 654 364

Sundry creditors for capital expenditure 20 55

Salary & incentive payable 848 –

Others 283 262

1,916 3,575

16. Authorized Share Capital

Particulars Equity Shares

(No. in Lakhs) ( in Lakhs)

At 1 April 2018 1,500 15,000

Increase/(decrease) during the year – –

At 31 March 2019 1,500 15,000

Increase/(decrease) during the year 1,000 10,000

At 31 March 2020 2,500 25,000

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of 10 per share. Each

holder of equity shares is entitled to one vote per share. The company declares and pays

dividends in Indian rupees. The dividend proposed by the Board of Directors is ratified by the

shareholders in the ensuing Annual General Meeting. In the event of liquidation of the

Company, the holders of equity shares will be entitled to receive remaining assets of the

Company, after distribution of all preferential amounts. The distribution will be in proportion to

the number of equity shares held by the shareholders.

Issued, Subscribed & Paid-up (No. in Lakhs) ( in Lakhs)

Equity Shares of INR 10 each issued, subscribed and fully paid

At 1 April 2018 1,445 14,450

Change during the year – –

At 31 March 2019 1,445 14,450

Changes during the year – –

At 31 March 2020 1,445 14,450

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates

Out of equity shares issued by the Company, shares held by its holding company, ultimate

holding company and their subsidiaries/associates are as below:

31 March 2020 31 March 2019

Axis Bank Limited, the holding company and its 14,450 14,450

nominees 1,445 Lacs (31 March 2019: 1,445 Lacs)

equity shares of

INR

10/- each

Details of shareholders holding more than 5% shares in the Company

Name of the Shareholder

31 March 2020 31 March 2019

Nos. % Nos. %

Axis Bank Limited, the holding company 1445 100.00 1445 100.00

and its nominees

As per records of the Company, including its register of shareholders/ members and other

declarations received from shareholders regarding beneficial interest, the above shareholding

represents both legal and beneficial ownerships of shares.

17. Other Equity

Capital reserve ( in Lakhs)

At 1 April 2018 4

Changes during the year –

At 31 March 2019 4

Changes during the year –

At 31 March 2020 4

Securities premium

At 1 April 2018 1,525

Changes during the year –

At 31 March 2019 1,525

Changes during the year –

At 31 March 2020 1,525

General reserve

At 1 April 2018 1,479

Changes during the year 775

At 31 March 2019 2,254

Changes during the year 159

At 31 March 2020 2,413

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

For the period ended 31 March 2020

Attributable to the equity holders of the parent

Reserves and Surplus

Capital Securities General Retained Other Deemed

reserve premium reserve earnings Compre- Equity

hensive

Income

As at 1 April 2019 4 1,525 2,254 14,439 (150) 475

Profit for the year 2,734 – 115

Other comprehensive income – 264 –

Additions during the year (521) –

Total comprehensive income 16,652 114 590

Final Equity dividend for FY 18-19

[(amount per share 2.30

(31 March 2018: 19,50,75,000)] (3,324)

Tax on equity dividend (683)

Transfer to General Reserve 159 (159)

At 31 March 2020 4 1,525 2,413 12,486 114 590

For the period ended 31 March 2020

Attributable to the equity holders of the parent

Reserves and Surplus

Capital Securities General Retained Other Deemed

reserve premium reserve earnings Compre- Equity

hensive

Income

As at 1 April 2018 4 1,525 1,479 7,952 (175) 320

Profit for the year ended

31 March 2019 7,262 115

Other comprehensive income – 25 –

Total comprehensive income 4 1,525 1,479 15,214 (150) 475

Transfer to General Reserve 775 (775)

Tax on equity dividend

At 31 March 2020 4 1,525 2,254 14,439 (150) 475

Captial reserve

Capital reserve is created by capital profits of the company which is not kept for distribution to the

shareholders in the form of dividend.This is included in the retained earning statements

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve can be

utilised only for limited purpose such as issuance of bonus shares in accordance with the provision

of Companies Act.

General reserve

Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer

of net income at a specified percentage in accordance with applicable regulations. The purpose

of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of

the paid up capital of the company for that year, then the total dividend distribution is less than

the total distributable results for that year. Consequent to introduction of Companies Act, 2013,

the requirement to mandatorily transfer a specified percentage of the net profit to general reserve

has been withdrawn. However, the amount previously transferred to general reserve can be utilised

only in accordance with the specific requirements of Companies Act, 2013.

18. Other income

31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Interest income on bank deposits & income tax refund 1,185 737

Profit on sale of investments (fair value through P & L) 129 75

Miscellaneous income 0* 4

Interest Accretion (Right of Use Asset) 15 –

Total 1,329 816

* The Amount is less than 50,000/-

19. Employee benefits expense

31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Salaries, wages and bonus 6,886 8,706

Contribution to provident and other funds 285 422

Staff welfare expenses 64 61

Gratuity expense 178 339

Total 7,413 9,528

20. Depreciation and amortization expense

31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Depreciation of tangible assets 483 590

Amortization of intangible assets 525 411

Impairment of tangible assets 112 62

Amortization of right-of-use assets 318 –

1,438 1,063

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

21. Finance Charges

31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Bank guarantee commission 104 82

Interest expense 127 145

Interest paid on lease liabilities 132 –

Total 363 227

22. Other expenses

31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Rent (premises) 10 727

Stamp, registration and exchange charges 2 3

Franking charges 102 132

Advertisement and sales promotion 114 382

Rates and taxes 80 22

Insurance 7 8

Housekeeping expenses 114 130

Security charges 51 73

Repair and maintenance- others 66 66

Travelling and conveyance 208 244

Communication cost 560 517

Call center cost 159 179

Information technology expenses 1,099 1,048

Loss on sale of fixed assets 51 65

Printing & stationery 236 107

Legal and professional fees 248 102

Director’s sitting fees 13 7

Auditors’ remuneration :

- Audit fee 25 17

- Out of pocket expenses – 0*

- Certification 5 –

Expense towards Corporate Social Responsibility (Note 38) 194 90

Electricity and water charges 144 169

Office expenses 26 31

Membership & subscription fees 102 89

Recruitment and training expenses 80 42

Allocated Expenses 1 –

Miscellaneous expenses 47 98

Bad debts 115 61

Provision for bad & doubtful debts 53 63

Sub brokerage – 3

DP- Transaction Charges 228 –

ROC filing fees 75 –

Total 4,215 4,475

* The Amount is less than 50,000

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

23. Discontinued operations

On 28 March 2019, Both Axis Bank Ltd and Axis Securities Ltd (ASL) have mutually taken decision

to exit Non Broking business pertaining to retail assets, credit cards, resource management

services etc. services offered by ASL to Axis Bank. During the transition of business subject to

terms and conditions compulsorily and expressly accepted by both the parties, the transition

cost incurred by ASL from April 1, 2019 onward till the arrangement is terminated will be billed

to Axis Bank. Being a discontinued operation, that segment is no longer presented in the

segment note.

Profit & Loss Statement of discontinued operations 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Revenue from operation 2,789 87,882

Other Income 66 407

Total Revenue 2,855 88,289

Expenses

Employee benefit expense 1,410 77,997

Depreciation amortization expense and Impairment 698 312

Finance charges – (9)

Interest paid on lease liabilities 30 –

Other expenses 52 3,296

Total Expense 2,190 81,596

Profit/(loss) before tax from a discontinued operation 665 6,693

Tax (expenses)/income: (183) (2,408)

Deferred Tax – 50

Profit/(loss) for the year from a discontinued operation 482 4,335

The major classes of assets and liabilities of Axis Securities Limited classified as held for distribution

to equity holders as at 31st March 2020 are, as follows:

31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Assets

Property, plant and equipment (Note 10) – 1,143

Intangible assets (Note 10) – 153

Other financial assets – 255

Other current assets – 811

Trade receivable – 8,193

Cash and cash equivalent – 4,949

Assets classified as held for distribution – 15,504

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Liabilities

Net employee defined benefit liabillities – 124

Long term provisions – 259

Short term provisions – 2,336

Liabilities for statutory dues – 2,866

Other current liabilities – 5,223

Liabilities directly associated with assets classified – 10,809

as held for distribution

Net assets directly associated with disposal group – 4,695

The net cash flows incurred by discontinuing operations are as follows:

31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Operating 482 (140)

Investing – 1,428

Financing – 10

Net Cash (outflow) inflow 482 1,298

Earning per share: 31 March 2020 31 March 2019

Basic, profit/(loss) for the year from discontinued operation 0.33 3.00

Diluted, profit/(loss) for the year from discontinued operation 0.33 3.00

Earning per share (EPS)

Particulars 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Profit attributable to equity holders of the parent:

Continuing operations 2,253 3,115

Discontinued operation 482 4,335

Profit attributable to equity holders of the parent for 2,734 7,450

basic earnings

Weighted average number of Equity shares for basic EPS 1,445 1,445

Earning per share: 31 March 2020 31 March 2019

( in Lakhs) ( in Lakhs)

Basic EPS from Continuing operations 1.56 2.16

Diluted EPS from Continuing operations 1.56 2.16

Basic EPS from Discontinued operation 0.33 3.00

Diluted EPS from Discontinued operation 0.33 3.00

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

24. Related Party Transaction

Names of related parties where control exists irrespective of whether transactions have

occurred or not.

Holding Company Axis Bank Limited

Key Management Mr. Arun Thukral

Personnel Mr. Anand Shaha

Mr. Hemantkumar Patel (Chief Financial Officer)

Ms. Lovelina Faroz (Company Secretary upto 29.10.19)

Ms. Divya Poojary (Company Secretary from 30.01.20 to till date)

Mr. Gopkumar Bhaskaran (Managing Director & CEO - 01.01.20 till date)

(Additional Director -18.10.19 to 31.12.19)

Fellow Subsidiaries

Axis Private Equity Limited (APEL)

Axis Finance Limited (AFL)

Axis Mutual Fund Trustee Limited (AMFTL)

Axis Trustee Services Limited (ATSL)

Axis Asset Management Company Limited (AAMCL)

Axis Bank U. K. Limited (ABUKL)

Axis Capital Limited (ACL)

A. Treds Limited (ATL)

Freecharge Payment Technologies Private Limited (FPTPL)

(w.e.f. 06 Oct 2017)

Accelyst Solutions Private Limited (ASPL) (w.e.f. 06 Oct 2017)

Axis Capital USA LLC. (w.e.f. 02 Aug 2017)

( in Lakhs)

Transaction/Nature of Holding Key Manage- Fellow Grand Total

Relationship Company ment Personnel Subsidiary

Income

Business sourcing fee income 1,024.92 – – 1,024.92

(45,962.94) – – (45,962.94)

Resource management fee – – – –

(41,912.27) – – (41,912.27)

Commission – – – –

(5.26) – – (5.26)

Interest on fixed deposits 54.74 – – 54.74

(59.54) – – (59.54)

Other income 17.90 – – 17.90

– – – –

Other income (AMTFL) – – 37.67 37.67

– – – –

Resource management fees (AAMC) – – 1.88 1.88

– – (6.71) (6.71)

Bank interest 2.47 – – 2.47

(0.96) – – (0.96)

Other income (AFL) – – 33.24 33.24

– – (47.31) (47.31)

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Other income (AAMC) – – – –

– – (182.92) (182.92)

Other income (ACL) – – 11.59 11.59

– – (19.85) (19.85)

Brokerage income (Mr. Arun Thukral) – 0.08 – 0.08

– (0.19) – (0.19)

Brokerage income (Mr. Anand Shaha) – 0.00 – 0.00

– (0.02) – (0.02)

Brokerage income (Mr. Hemantkumar Patel) – 0.01 – 0.01

– (0.02) – (0.02)

Expenses

Salaries (Mr. Gopkumar Bhaskaran) – 122.02 – 122.02

–– – –

Salaries (Mr. Arun Thukral) 142.19 – – 142.19

(185.12) – – (185.12)

Salaries (Mr. Anand Shaha) – 94.25 – 94.25

– (80.15) – (80.15)

Salaries (Mr. Hemantkumar Patel) – 58.66 – 58.66

– (52.53) – (52.53)

Salaries (Ms. Lovelina Faroz) – 9.70 – 9.70

– (14.66) – (14.66)

Salaries (Ms. Divya Poojari) – 3.04 – 3.04

–– – –

Reimbursement for expenses 6,160.18 – – 6,160.18

(645.79) – – (645.79)

Reimbursement for expenses (Mr. Arun Thukral) – 0.50 – 0.50

(1.41) (0.56) – (1.97)

Bank charges & other charges paid 114.45 – – 114.45

(73.43) – – (73.43)

Other expenses/ reimbursements (ACL) – –

– – (1.42) (1.42)

Other transactions

Other reimbursement received (AFL) – – – –

–– – –

Training Exp reimbursement(Cross Sell) – – – –

(12.99) – – (12.99)

Reimbursement of operating expenses – – – –

(2.65) (0.14) – (2.78)

Dividend paid 3,323.50 – – 3,323.50

–– – –

Income

Unamortised DP AMC transferred to ASL 1,873.73 – – 1,873.73

–– – –

Income

Transition Exp reimbursement – – – –

577.51 577.51 – –

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Income

Sale of asset – – – –

3.55 – – 3.55

Outstanding balance as at 31 March 2020

Other payables 164.75 – 54.82 219.57

(163.46) – – (163.46)

Accounts receivable-for services rendered 17.69 – – 17.69

(8,192.44) – – (8,192.44)

Other payables (AFC) – – 484.30 484.30

– – (226.34) (226.34)

Accounts receivable-for services rendered- – – – –

(AAMC)

– – (0.49) (0.49)

Other receivables (AAMC) – – – –

–– – –

Other receivables (ACL) – – 0.11 0.11

–– – –

Other receivables (AFL) – – 0.06 0.06

– – (0.03) (0.03)

Royalty Charges Payable 7.60 – – 7.60

–– – –

Overdraft Bank Balance 9.65 – – 9.65

–– – –

Current account 12,178.65 – – 12,178.65

(6,276.19) – – (6,276.19)

Fixed deposit balance 1,699.08 – – 1,699.08

(5,081.76) – – (5,081.76)

Notes:

1) As the liabilities for gratuity and leave encashment are provided on an actuarial basis for the Company as a

whole, the amount pertaining to the directors are not included above.

2) Figures in bracket represents corresponding amount of previous year.

25. Leases Disclosure under Ind AS 116

Company as a Lessee

Set out below are the carrying amounts of right-of-use assets recognised and the movements

during the period:

( in Lakhs)

ROU assets Total

As at April 1, 2019 1,707 1,707

Addition 401 401

Depreciation (803) (803)

As at March 31, 2020 1,305 1,305

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Set out below are the carrying amounts of lease liabilities (included under interest-bearing

loans and borrowings) and the movements during the period:

( in Lakhs)

As at Total

March 31, 2020

As at 1st April (2,322) (2,322)

Addition (370) (370)

Accretion of interest (161) (161)

Payments 1,202 1,202

As at March 31, 2020 (1,651) (1,651)

The Maturity analysis of lease liabilities is as under:

( in Lakhs)

Lease liabilities As at

March 31, 2020

Not later than 1 month (37)

Later than 1 month not later than 3 months (74)

Later than 3 month not later than 1 year (354)

Later than 1 year (1,186)

Total (1,651)

The following are the amounts recognised in statement of profit or loss:

( in Lakhs)

Particulars As at

March 31, 2020

Depreciation expense of right-of-use assets 803

Interest expense on lease liabilities 161

Expense relating to short-term leases –

Expense relating to leases of low-value assets –

Variable lease payments –

Total amount recognised in profit or loss 964

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

The Company had total cash outflows for leases of 1202 lakhs in FY 19-20 ( 1473 lacs in FY

18-19). The Company also had non-cash additions to right-of-use assets of 401 Lakhs and

lease liabilities of 370 Lakhs in FY19-20.

26. Details of Foreign currency transactions

Expenditure in foreign currency (accrual basis) 2019-20 2018-19

( in Lakhs) ( in Lakhs)

Subscription charges 15 51

Sales Promotion – 25

15 76

27. Gratuity and other benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five

years or more of service gets a gratuity on retirement at 15 days salary (last drawn salary) for

each completed year of service. The schemes are funded with insurance companies in the

form of a qualifying insurance policies.

The following tables summarize the components of net benefit expense recognized in the

Statement of profit and loss and the funded status and amounts recognized in the balance

sheet for the respective plans.

Particulars 2019-20 2018-19

( in Lakhs) ( in Lakhs)

In statement of Profit and Loss 207 195

In other comprehensive Income (164) (39)

Total Expenses Recognized for the period 43 157

Net employee benefit expense (recognized in employee cost)

2019-20 2018-19

( in Lakhs) ( in Lakhs)

Current service cost 177 175

Past service cost – –

Administration expenses – –

Interest on net defined benefit liability / (asset) 30 20

(Gains) / losses on settlement – –

Total expense charged to profit and loss account 207 195

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Amount recorded in Other comprehensive income

2019-20 2018-19

( in Lakhs) ( in Lakhs)

Opening amount recognized in OCI outside profit and

loss account 231 269

Remeasurements during the period due to –

Changes in financial assumptions 19 4

Changes in demographic assumptions – 4

Experience adjustments (159) (27)

Actual return on plan assets less interest on plan assets (24) (19)

Adjustment to recognize the effect of asset ceiling – –

Closing amount recognized in OCI outside profit and loss account 67 231

Balance Sheet

Details of provision for gratuity

2019-20 2018-19

( in Lakhs) ( in Lakhs)

Present value of obligation as at the end of the year 347 424

Fair value of plan assets 119 39

Net funded obligation

Net defined benefit liability recognized in balance sheet (228) (385)

Movement in benefit obligation are as follows:

2019-20 2018-19

( in Lakhs) ( in Lakhs)

Opening defined benefit obligation 424 733

Current service cost 177 175

Past Service Cost – –

Interest on defined benefit obligation 42 38

Remeasurements due to:

Actuarial loss / (gain) arising from change in financial assumptions 19 4

Actuarial loss / (gain) arising from change in demographic assumptions – 4

Actuarial loss / (gain) arising on account of experience changes (159) (27)

Benefits paid (156) (502)

Closing defined benefit obligation 347 424

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Changes in fair value of plan assets are as follows :

2019-20 2018-19

( in Lakhs) ( in Lakhs)

Opening fair value of plan assets 39 355

Employer contributions 200 150

Interest on plan assets 12 18

Administration expenses – –

Remeasurements due to: –

Actual return on plan assets less interest on plan assets 24 19

Benefits paid (156) (502)

Closing fair value of plan assets 119 39

The Company expects to contribute 15,000,000 to gratuity in the next year.

The major categories of plan assets as a percentage of the fair value of total plan assets are

as follows:

For the year For the year

ended ended

31 March 2020 31 March 2019

Investment with insurer 100% 100%

DISGGREGATION OF PLAN ASSETS

A split of plans asset between various asset classes as well as segregation between quoted

and unqoted values is presented below:

Period Ended

31 Mar 2020

( in Lakhs)

Quoted Non–Quoted Total

Property – – –

Government debt instrument – – –

Other debt instruments – – –

Entity’s own equity instrument – – –

Insurer managed funds – 119 119

Other – – –

The overall expected rate of return on assets is determined based on the market prices

prevailing on that date, applicable to the period over which the obligation is to be settled.

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

The principal assumptions used in determining gratuity obligations are shown below:

2019-20 2018-19

( in Lakhs) ( in Lakhs)

Discount rate

Broking 6.30% 7.00%

Non-broking (discontinuing operations) – 6.55%

Expected rate of return on assets

Broking 7.25% 7.50%

Non-broking (discontinuing operations) – 6.55%

Employee turnover

For Broking

Managerial

Age : 21-44 years 20.00% 20.00%

Age : 45-59 years 1.00% 1.00%

Non-Managerial

Age : 21-44 years 60.39% 60.39%

Age : 45-59 years 1.00% 1.00%

For Non Broking (discontinuing operations)

Managerial

Age : 21-44 years – 35.00%

Age : 45-59 years – 1.00%

Non-Managerial

Age : 21-44 years – 89.76%

Age : 45-59 years – 1.00%

Salary escalation rate

Broking 7.75% 7.64%

Non-broking (discontinuing operations) – 6.82%

The estimates of future salary increases considered in actuarial valuation, take account of

inflation, seniority, promotion and other relevant factors, such as supply and demand in the

employment market.

Estimated provision for defined benefit obligation for Key Managerial Persons is shown as below:

Key Managerial Person Gratuity

FY 19-20 FY 18-19

DBO (In lakhs )

Post-employment benefit 15.98 10.20

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

SENSITIVITY ANALYSIS:

Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to

small changes in demographic assumptions. The key actuarial assumptions to which the benefit

obligation results are particularly sensitive to are discount rate and future salary escalation

rate. The following table summarizes the change in defined benefit obligation and impact in

percentage terms compared with the reported defined benefit obligation at the end of the

reporting period arising on account of an increase or decrease in the reported assumption by

50 basis points

( in Lakhs)

Period Ended

31-Mar-20

Discount Rate Salary Escalation

Defined benefit obligation on increase in 50 bps 335 359

Impact of increase in 50 bps on DBO -3.43% 3.50%

Defined benefit obligation on decrease in 50 bps 360 335

Impact of decrease in 50 bps on DBO 3.69% -3.39%

Maturity Profile of Defined Benefit Obligation

Weighted average duration (based on discounted cashflows) is 8.18 years

Expected cash flows over the next (valued on undiscounted basis): ( in Lakhs)

1 years 95

2 to 5 years 111

6 to 9 years 61

10 years and above 344

28. INCOME TAX

The Company offsets tax assets and liabilities if an only if it has legally enforceable right to set

off current taxes assets and current taxed liabilities and the deferred tax assets and deferred

tax liabilities relate to income taxes levied by the same tax authority

Deferred Tax :

Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach,

which focuses on temporary differences between the carrying amount of an asset or liability

in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in

recognition of deferred tax on new temporary differences which was not required under Indian

GAAP. The company has recognized DTA in books as per Indian GAAP to the extent of 364

lakhs (Previous year : 573.71 Lakhs)

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

In addition, the various transitional adjustments lead to temporary differences. According to

the accounting policies, the Company has to account for such differences. Deferred tax

adjustments are recognized in correlation to the underlying transaction either in retained

earnings or a separate component of equity.

Deferred Tax Calculation Balance Sheet

31 March 20 31 March 19

( in Lakhs) ( in Lakhs)

Deferred tax Assets

Compensated absence cost – 48

Rent- Lease equalisation 190 135

Provision for doubtful debts 78 89

Retirement benefits 58 135

Advance Subscription Income – 630

Depreciation 178 167

Net deferred tax assets/(liabilities) 504 1,204

Reflected in the balance sheet as follows:

31 March 20 31 March 19

( in Lakhs) ( in Lakhs)

Deferred tax assets 504 1,204

Deferred tax liabilities – –

Deferred tax Assets/(liabilities), net 504 1,204

29. Estimated amount of contracts remaining to be executed on capital account and not provided

for:

31 March 20 31 March 19

( in Lakhs) ( in Lakhs)

Commitment for addition/acquisition of

broking software 154 233

Commitment for office equipment / furniture 4 20

Commitment for computer / servers 137 189

Commitment for leasehold improvement and other

capital assets 38 41

Total 333 483

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

30. Expected credit loss

The company has adopted simplified method for ECL provision on receivables. The provision

is made in following manner:-

Receivable outstanding for more than 90 days, 50% of the amount is provided. A further 50%

is provided for if the outstanding is for more than 180 days.

( in Lakhs)

Trade receivable 0-90 90-180 More than Total

days past due days days 180 days

ECL rate 0% 50% 100%

31-Mar-20 Other Trade Receivable 733 74 189 996

ECL- simplifiedapproach – (38) (189) (228)

Net Amount 733 35 – 768

31-Mar-19 Other Trade Receivable 342 91 187 620

ECL- simplifiedapproach – (45) (187) (233)

Net Amount 342 45 – 388

The Company assesses allowance for expected credit losses for loans. The ECL allowance is

assessed based on the 12 months’ expected credit loss. ECL is calculated on collective basis

for loans. The Company has not experienced any loss on its loan portfolio historically.

( in Lakhs)

Trade receivable 0-90 90-180 More than Total

days past due days days 180 days

ECL rate 0% 50% 100%

31-Mar-20 Loans 4,321 – – 4,321

ECL (22) – – (22)

Net Amount 4,299 – – 4,299

31-Mar-19 Loans 10,262 – – 10,262

ECL – – – –

Net Amount 10,262 – – 10,262

31. At the beginning of the year there was no amount payable to any Micro, Small and/or Medium

Enterprises as defined under Micro, Small and Medium Enterprise Development Act, 2006. The

outstanding balance as on 31 March 2020 and 31 March 2019 are Nil.

The Company also has not received any claims against interest outstanding amount due to

any vendor registered under Micro, Small and Medium Enterprises Development Act, 2006.

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

32. Outstanding bank guarantee issued on behalf of the Company:

2019-20 2018-19

( in Lakhs) ( in Lakhs)

ICICI Bank 10,000 10,000

Bank of Baroda – 5,500

HDFC Bank Ltd 5,000 –

IndusInd Bank 1,473 1,840

Total 16,473 17,340

33. Earnings per share (‘EPS’)

2019-20 2018-19

( in Lakhs) ( in Lakhs)

Profit / (loss) after tax 2,734 7,451

Net profit / (loss) for calculation of basic and diluted EPS 2,734 7,451

No. No.

Weighted average number of equity shares in calculating

basic and diluted EPS 14,45,00,000 14,45,00,000

Basic earnings per share ( ) 1.89 5.16

Diluted earnings per share ( ) 1.89 5.16

Particulars 2019-20 2018-19

( in Lakhs) ( in Lakhs)

Profit attributable to equity holders of the parent:

Continuing operations 2,252 3,116

Discontinued operation 482 4,335

Profit attributable to equity holders of the parent for basic earnings 2,734 7,451

Weighted average number of Equity shares for basic EPS* 1,445 1,445

Earnings per share: 31 March 31 March

2020 2019

Basic EPS from continuing operation ( ) 1.56 2.16

Diluted EPS from continuing operation ( ) 1.56 2.16

Basic EPS from discontinuing operation ( ) 0.33 3.00

Diluted EPS from discontinuing operation ( ) 0.33 3.00

Notes forming part of the financial statements for the year ended 31 March, 2020

Equity shares and derivative transactions pertains to error trades.

A Subsidiary of AXIS BANK

34. Contingent liability :

A contingent liability is a possible obligation that arises from past events whose existence will

be confirmed by the occurrence or non-occurrence of one or more uncertain future events

beyond the control of the Company or a present obligation that is not recognized because it

is not probable that an outflow of resources will be required to settle the obligation. A

contingent liability also arises in extremely rare cases where there is a liability that cannot be

recognized because it cannot be measured reliably. The Company does not recognize a

contingent liability but discloses its existence in the financial statements.

Claims against the Company not acknowledged as debt. ( in Lakhs)

Nature of statute Description Forum where As on 31 As on 31

dispute is March 2020 March 2019

pending

Stamp Act Penalty on MP High – 18

Stamp Duty Court

Income Tax Penalty ITAT – 5

Income Tax Income Tax CIT (A) 280 280

Note:

The Company is contesting the demands and the management believes that its position will

likely be upheld in the appellate process. No provision has been accrued in the financial

statements for the demand raised. The management believes that the ultimate outcome of

this proceeding will not have a material adverse effect on the Company’s financial position

and results of operations.

35. (a) Financial assets at FVTPL

Category Opening Stock Closing Stock

Quantity Value Quantity Value

( in Lakhs) ( in Lakhs)

Equity shares Nil Nil Nil Nil

Derivatives Nil Nil Nil Nil

Mutual funds Nil Nil Nil Nil

Category Opening Stock Closing Stock

Quantity Value Quantity Value

( in Lakhs) ( in Lakhs)

Equity shares 26,204 71 26,204 71

(18,335) (55) (18,335) (55)

Derivatives 1,82,594 788 1,82,594 789

(6,290) (110) (6,290) (110)

Mutual funds 37,81,969 79,530 37,81,969 79,716

(67,14,797) (1,34,679) (67,82,342) (1,36,154)

Equity shares and derivative transactions pertains to error trades.

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

36 FAIR VALUES

Set out below is a comparison by class of the carrying amount and fair value of the Company’s

financial instruments other than those with carrying amounts that are reasonable

approximations of fair value:

( in Lakhs)

Financial Assets Carrying Value Fair Value

31 March 20 31 March 19 31 March 20 31 March 19

Security Deposits 269 587 199 455

The fair value of the financial assets and liabilities is included at the amount at which the

instrument could be exchanged in a current transaction between willing parties, other than in

a forced or liquidation sale. The following methods and assumptions were used to estimate

the fair value:

a) Long-term fixed-rate and variable-rate receivables/borrowings are evaluated by the

Company based on the parameters such as interest rates.

b) Fair value of the Deposits & Advances is measured using the DCF (discounting cash

flow) model.

The fair value measurement of the financial liability of the Company being Commercial papers

is done by transaction cost incurred in initial recognition is included in the initial recognition

amount of the financial liability and charged to profit or loss using effective interest method.

The own non-performance risk as at 31st March 2020 is assessed to be insignificant.

The management assessed that cash and cash equivalents, trade receivables, margin with

exchanges, trade payables, bank balances and other current liabilities approximate their

carrying amount largely due to the short-term maturities of these instruments.

FAIR VALUE HIERARCHY

Following table provides the fair value measurement hierarchy of the Company’s assets and

liabilities as on 31st March 2020 & 31st March 2019.

( in Lakhs)

The following table provides the fair value measurement hierarchy of the Company’s Assets

Quantitative disclosures fair value measurement hierarchy for assets as at 31st March 2020

Fair value measurement using

Date of Total Quoted prices Significant Significant

Valuation in active Observable unobservable

markets inputs inputs

Assets measured

at Fair Value

Security Deposits 31.03.2020 199 – – 199

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

( in Lakhs)

The following table provides the fair value measurement hierarchy of the Company’s Assets

Quantitative disclosures fair value measurement hierarchy for assets as at 31st March 2019

Fair value measurement using

Date of Total Quoted prices Significant Significant

Valuation in active Observable unobservable

markets inputs inputs

Assets measured

at Fair Value

Security Deposits 31.03.2019 455 – – 455

Assets and liabilities by fair value hierarcy

The following table shows an analysis of financial instruments recorded at fair value by level of

the fair value hierarcy:

31 March 2020 ( in Lakhs)

Level 1 Level 2 Level 3 Total

Assets measured at fair value

on a recurring basis

Security Deposits – – 199 199

31 March 2019 ( in Lakhs)

Level 1 Level 2 Level 3 Total

Assets measured at fair value

on a recurring basis

Security Deposits – – 455 455

37. FINANCE COST

Particulars 31 March 20 31 March 19

( in Lakhs) ( in Lakhs)

Interest on ODBD 87 47

Interest on ODFD 26 25

Interest - Others 14 10

Interest on CP – 64

Interest paid on lease liabilities 132 –

BG Commission 104 82

363 227

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

38 CSR expenditure

31 March 20 31 March 19

( in Lakhs) ( in Lakhs)

Gross amount required to be spent by the company

during the year 194 151

194 151

(a Amount spent during the year In cash Yet to be Total

ending on March 31, 2020: paid in cash

( in Lakhs) ( in Lakhs) ( in Lakhs)

i) Construction/acquisition of any asset – – –

ii) On purposes other than (i) above 194 – 194

(b Amount spent during the year In cash Yet to be Total

ending on March 31, 2019: paid in cash

( in Lakhs) ( in Lakhs) ( in Lakhs)

i) Construction/acquisition of any asset – – –

ii) On purposes other than (i) above 151 – 151

39A Reconciliation of equity and profit reported in accordance with previous Indian GAAP and

Ind AS to explain how the transition from the previous Indian GAAP to Ind AS effected is provided

below:-

Reconciliation of Total equity ( in Lakhs)

31 March 20 31 March 19

( in Lakhs) ( in Lakhs)

Total equity as per Indian GAAP – 34,168

Adjustments

Amortization of Subscription income – (1,801)

Tax effects of adjustment – 629

Total adjustments – (1,172)

Total equity as per Ind AS – 32,997

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Net Profit Reconciliation is as under ( in Lakhs)

31 March 20 31 March 19

( in Lakhs) ( in Lakhs)

Net profit after tax reported under Indian GAAP – 7,747

Adjustments

Amortization of Subscription income – (468)

Adjustment due to fair valuation of employee stock options – (155)

Actuarial gain/loss on valuation of gratuity – (39)

Tax effects of adjustment – 177

Total adjustments – (485)

Net profit after tax as per Ind AS – 7,262

Other comprehensive income, net of tax – 189

Total comprehensive income – 7,451

Footnotes to the reconciliation of equity and profit or loss

a. FVTPL Financial assets

Under Indian GAAP, the company accounted for short term investment in quoted liquid

mutual funds as investment measured at cost less provision for other than temperory

diminution in the value of investment. Under Ind AS, the company has designated such

investment as FVTPL investment. Ind AS requires FVTPL investment to be measured at fair

value. As at the date of transition to Ind AS, there is no such investment in the balance

sheet.

b. Trade receivable

Under Indian GAAP, the company has created provision for impairment of receivables.

Under Ind AS, the Company has adopted simplied method for computation of Expected

Loss Model (ECL).The simplified approach is similar to model used under Indian GAAP.

Hence there has been no impact on account of application of ECL model under Ind AS

c. Reclassification of subscription income

Under Indian GAAP, the subscription income was amortised over the period of the plan.

Under Ind AS, the subscription income is recognised on the basis of utilisation of turnover

provided under the plan.Consequently reclassification adjustment is recorded for the

same.

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

d. Defined benefit liabilities

Both under Indian GAAP and Ind AS, the group recognised costs related to its post-

employment defined plan on an actuarial basis. Under Indian GAAP, the entire cost,

including acturial gains and losses, are charged to profit and loss. Under Ind AS,

remeasurements [comprising of acturial gains and losses, the effect of asset ceiling,

excluding amount included in net interest on the defined benefit liability and the return

on plan assets excluding amounts included in net interest on the net defined benefit

liability] are recognised immediately in the balancesheet with as corresponding debit or

credit to retained earnings through OCI. Thus the employee benefit cost is reduced by

183.57 lakhs and 85.63 lakhs for year ended 31 March 2018 and 31 March 2017

respectively and remeasurement gains / losses on defined benefit plans has been

recognised in the OCI net of tax.

e. Security deposit

Under Indian GAAP, interest free security deposit for leasehold premises is taken at carrying

value in the balance sheet. Under Ind AS, the security deposit value has been discounted

to present value at each balancsheet date starting the date of transition i.e 1 April 2017.

The impact of EIR on Security deposit is 8.40 lakhs (discounting rate 9.43 %) and 12.70

lakhs (discounting rate 9.43%) for financial year ending 31 March 2020and 31 March

2019 respectively

f. Deferred tax

Indian GAAP requires deferred tax accoutning using the statement of profit and loss

approach, which focuses on differences between taxable profits and accounting profits

for the period. Ind As 12 requires entities to account for deferred taxes using balancsheet

approach, which focuses on temperory differences between the carrying amount of an

asset or liability in the balance sheet and its tax base. The application of Ind AS 12

approach has not resulted in recognition of deferred tax on new temperory differences

which was not required under Indian GAAP

g. Other comprehensive income

Under Indian GAAP, the company has not presented other comprehensive (OCI)

separatley. Hence it has reconciled Indian GAAP profit or loss to profit or profit or loss as

per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income

as per Ind AS

h. Statement of cash flows

The transition from Indian GAAP to Ind As has not a material impact on the statement of

cash flows

Notes forming part of the financial statements for the year ended 31 March, 2020

A Subsidiary of AXIS BANK

Notes forming part of the financial statements for the year ended 31 March, 2020

39B Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax

rate for 31 March 2020 and 31 March 2019:

31 March 20 31 March 19

( in Lakhs) ( in Lakhs)

Accounting profit before tax from continuing operations 4,644 4,551

Profit/(loss) before tax from a discontinuing operations 665 6,693

Accounting profit before income tax 5,309 11,244

At India’s statutory income tax rate of 22% (31 March 2019: 30%)

Adjustments in respect of conversion from Indian GAAP to Ind AS

Timing difference in gratuity as per Ind As (13) 16

Timing difference in subscription as per Ind As (629) 168

Timing difference in Fixed Assets 10 130

Timing difference for other items (171) 55

Deductions u/s Chapter VIA 97 67

Non-deductible expenses for tax purposes:

Impairment of business expenses – –

Other non-deductible expenses 2,354 1,760

Allowable Expenses (1,365) (1,333)

Short Term Capital Gains 186 175

At the effective income tax rate of 25.17% (31 March 2019: 27%)

Income tax expense reported in the statement of profit and loss – –

Basic Tax 1,405 3,732

Surcharge 141 448

Education Cess 62 167

Excess Provision for Last year – –

DTA Rate change effect (314) 7

Income tax expense reported in the statement of profit and loss 1,608 4,347

Income tax attributing to round off (0.47) (0.48)

40. Share based payments

Employee Stock Options granted by holding company

During the year, the holding company issued Current Year NIL(Previous year:74,000) of stock

options to some employees of the holding company who are on deputation with the Company.

Further the holding company has also issued Current Year NIL (Previous year: 20,000) stock

options directly to the employees of the Company. Since these stock options are issued by

the holding company directly to the employees of the Company or holding company and

the related costs, if any, will be borne by the holding company, no provision is made in the

accompanying financials statements.

100

A Subsidiary of AXIS BANK

Notes forming part of the financial statements for the year ended 31 March, 2020

The expense recognised for employee services (company’s employee) received during the

year is shown in the following table ( in Lakhs)

31 March 20 31 March 19

Expense arising from equity-settled share-based 115 155

payment transactions

115 155

41. During the year the company has paid Rs. 28.45 crores to Axis Bank Limited towards transfer of

Client’s Demat accounts. The said transaction is of exceptional nature and is non recurring

and has been disclosed accordingly. The total accounts transferred are 1896451 accounts.

42 As the global pandemic COVID-19 continues to spread, on March 24, 2020, the Indian

government announced a strict 21-day lockdown which was further extended by 19 days

across the country to contain the spread of the virus. The management has assessed the

internal and external information upto the date of approval of these financial statements

including economic forecasts and concluded that there is no material impact of Covid-19 on

the Company’s future performance.

43. Previous year comparatives

Previous year figures have been regrouped and reclassified, wherever necessary to conform

to current year’s presentation.

44 Events after reporting date

There have been no events after the reporting date that require disclosure in these financial

statements.

For S.R.Baltiboi & Co. LLP For and on behalf of the Board of Directors

Firm Registration No.: 301003E/E300005

Chartered Accountants

Pralay Mondal

Chairman

DIN No: 00117994

per Jitendra H. Ranawat

Partner Gopkumar Bhaskaran Anand Shaha

Membership No. : 103380 Managing Director & CEO Whole-Time Director

DIN No: 07223999 DIN No: 02421213

Hemantkumar Patel Divya Poojari

Place : Mumbai Chief Financial Officer Company Secretary

Date : April 23, 2020 PAN: AGOPP9611N PAN: BIJPP6102N